Ready, Set, Go: First Iron Ore Replacement Mine Gets Underway

The first of three multi-billion dollar iron ore replacement mines announced earlier in 2018 is now underway, with works at BHP’s South Flank mine beginning this week.

The start of works at BHP’s (ASX:BHP,NYSE:BBL,LSE:BLT) soon-to-be shiny new iron ore mine in Western Australia began with not a bang, but a political pony show and a polite smattering of applause.

At the turning of the sod ceremony at the future site of the South Flank project in the Pilbara, Western Australian Premier Mark McGowan said that the AU$4.8-billion (US$3.4 billion) investment from the mining giant and its JV partners was a sign that the economy had “turned a corner” in the Australian state.

“It shows that there is confidence in Western Australia once again,” said McGowan.

The premier also took the opportunity to announce the government had now given all relevant approvals for the project, which BHP gave its own internal green light to last month.

With all the approvals in place, major construction works will now proceed on the project, which BHP alone will be spending US$2.9 billion on.

The Western Australian premier has plenty to be happy about, as South Flank is the first of three multi-billion dollar projects operated by majors across the Pilbara, which will deliver hundreds of millions of dollars in royalties into state coffers.

Overall, the South Flank project is expected to produce over 3,000 jobs in the Western Australian region, which is also home to two other similar major renewal projects—Rio Tinto’s (ASX:RIO,NYSE:RIO,LSE:RIO) US$2.2-billion Koodaideri project and Fortescue Metals’ (ASX:FMG) US$1.275-billion Eliwana project.

The Anglo-Australian miner has an 85-percent stake in the South Flank project, with the balance owned by Japanese conglomerates Mitsui (TSE:8031), which controls 7 percent, and ITOCHU (TSE:8001), which controls 8 percent of the project.

BHP said that South Flank will fully replace production from the 80-million-tonne per year Yandi mine, also in the Pilbara, with first ore expected in 2021 and an estimated mine life of 25 years.

The company also said in its quarterly report that the project would contribute to an increase in average iron grade from 61 percent to 62 percent from its Western Australian iron ore operations.

The miner has been moving pieces into place to ensure works proceed on time, with a AU$176-million contract awarded to NRW Holdings (ASX:NWH) for bulk earthworks and concrete works commencing in September this year.

South Flank is just one part of a BHP’s long-term plans for iron ore mining in the Australian state, having recently received a nod from the Environmental Protection Agency (EPA) for up to a century’s worth of environmental assessment approvals.

On the Australian Securities Exchange, shares of BHP were up 2.24 percent, closing at AU$33.75 on Wednesday (July 25).

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

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Interested in gold in Australia? Here's a brief overview of what investors should know about where the yellow metal is found in the country.

With gold in focus due to Russia's invasion of Ukraine, some experts are expecting its price to reach all-time highs as investors seek traditionally safe-haven investments.

If you’re interested in investing in gold right now, you may want to turn your attention to Australia, which is currently the second largest gold-producing country in the world.

Read on for a breakdown of gold in Australia, including a look at how each state and territory contributes.


Gold in Australia: Australia's place in the world

As mentioned, Australia is currently the second largest gold-producing country globally, just behind China. Gold production in the country reached a high of 330 tonnes in 2021, up from 328 tonnes the previous year.

“There are three countries that combine the rule of law with significant gold production: Canada, the US and Australia. Outside of these three, there’s not much gold, or there’s not much protection for individual investors and companies,” Kevin McElligott, managing director of Australia at Franco-Nevada (TSX:FNV,NYSE:FNV), explained to the Investing News Network in a 2019 email interview.

According to the Office of the Chief Economist, Australian gold mine production is forecast to rise at an average annual rate of 8 percent from 2020 to 2021 and 2022 to 2023. Anticipated production of 374 tonnes by 2022 to 2023 will be propelled by both production from new mines and existing mine expansions.

Western Australia is the centre of gold exploration activity in the country, accounting for 70 percent, or AU$1.07 billion, of total gold exploration expenditure. In 2022, the Fraser Institute named Western Australia the best mining jurisdiction in the world. Its Pilbara region is a big part of why the state is attracting attention.

In recent years, Pilbara exploration activity has seen renewed interest and helped increase the country’s consistent gold output. Covering more than half a million square kilometres, the region has attracted major miners like Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) and BHP (ASX:BHP,NYSE:BHP,LSE:BHP).

Western Australia accounts for the bulk of the country's gold output, and the geology of the Pilbara Craton has been compared to South Africa’s Kaapvaal Craton and Witwatersrand Basin. Witwatersrand is home to the Earth’s largest known gold reserves and is responsible for over 40 percent of worldwide gold production.

Both the Pilbara and Witwatersrand are similar in age and composition, sitting on top of the Archean granite-greenstone basement. The Pilbara area hosts numerous small mesothermal gold deposits containing conglomerate gold — mineralization known to hold large, high-grade gold nuggets.

Gold in Australia: Production by region

Click through the links below to learn more about gold mining in Australia's states and territories. The data used is from Geoscience Australia, and the 2018 gold production numbers are the latest available.

Gold in Australia: Western Australia

As mentioned, Western Australia is a gold powerhouse, and its output stands well above that of its fellow Australian states and territories, measuring at 211 tonnes in 2018.

Gold in Australia: New South Wales

New South Wales has a long history with gold, being the home of the first Australian gold rush in the mid-1800s, which helped kickstart the then-colony’s burgeoning economy. Gold found in Central New South Wales triggered an obsession with mining that burned for decades. In 2018, the state's production was 39 tonnes.

Gold in Australia: Queensland

Queensland may be best known for its coal exports, but the state is dotted with active mines, with a modest collection that produce gold. It put out 18 tonnes of the yellow metal in 2018.

Gold in Australia: Northern Territory

The Northern Territory produced only 15 tonnes of gold in 2018, but over its lifetime more than 20 million ounces have been pulled out of the ground in the region. The Pine Creek, Tennant Creek and Tanami goldfields are the primarily places where this metal has been extracted.

Gold in Australia: Victoria

Victoria also has a strong gold-mining history, although today it's a smaller-scale producer. In 2018, 13 of the 315 tonnes of gold mined in Australia came from Victoria from seven active mines — most of which are located within regions known for vast historical output of the yellow metal

Gold in Australia: South Australia

South Australia isn't a major gold miner, although it accounts for over a quarter of the country’s gold resources — in 2018, just 8 tonnes of gold were mined in the state. However, the area has potential, with a major geological region — the Gawler Craton — identified by the government and mineral explorers as being of extreme interest.

Gold in Australia: Tasmania

Tasmania is geologically diverse with a number of major operating mines, but it is not a significant gold producer. Its output of the precious metal clocked in at only 1 tonne in 2018.

This is an updated version of an article originally published by the Investing News Network in 2019.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Matthew Flood, currently hold no direct investment interest in any company mentioned in this article.

hydrogen symbol with globe

Wondering about the future of hydrogen in Australia? Here's an overview of investing in hydrogen in the country.

Hydrogen has long been touted as the most important clean energy source of the future. However, 99 percent of hydrogen produced today is derived from power generated by coal or gas.

Thanks to technological advances and massive new investments made by the public and private sector, the industry is now making the critical transition towards clean "green" hydrogen — in other words, hydrogen that is produced via zero-carbon and low-carbon energy sources.

Australia, like most western nations, is determined to decarbonise its economy as part of the global transition toward renewables. Many industries now face strict targets for reducing emissions as part of the drive to lessen the carbon footprint left by Australia's steel and coal industries.


Although hydrogen is generally seen as a long-term investment play given the many years it takes to build new plants and add capacity in the market, last year saw investors rush to get in on the ground floor of the rapidly expanding Australian green energy market as smaller players began to make their mark.

In 2021, the ASX hydrogen sector saw some exponential gains in the share prices of several up-and-coming players, including Province Resources (ASX:PRL), Pure Hydrogen (ASX:PH2), Sparc Technologies (ASX:SPN), Environmental Clean Technologies (ASX:ECT) and QEM (ASX:QEM). These five companies led the way in driving interest in the kind of opportunity that the Australian hydrogen industry represents, both in the short and long term. Several key public/private partnerships also played a role in stimulating market interest.

Hydrogen investing in Australia: What is hydrogen and how is it used?

Hydrogen is the most abundant element on Earth. It is a colourless gas that can be burned to generate electricity, or alternatively can be combined with oxygen atoms in fuel cells. Hydrogen can be produced in gas or liquid form, and has the ability to replace fossil fuels in household heating, transportation and industrial manufacturing processes like steelmaking, which consumes massive amounts of power.

As a fuel, the great advantage of hydrogen is that it produces no carbon emissions, only water as a by-product. First discovered 250 years ago by English physicist Henry Cavendish, hydrogen was initially used in combination with oxygen to power internal combustion engines, hydrogen gas blowpipes and hydrogen gas lamps. It was later used in the construction of hydrogen-lifted airships and German Zeppelins until passenger service was abandoned after the tragic 1937 explosion of the Hindenburg Zeppelin in New Jersey, which killed 36 people.

Currently, the hydrogen market is valued at over US$100 billion, with the material being used widely as an industrial chemical, mainly by the petroleum industry for the production of ammonia, a principal ingredient in the manufacturing of nitrate fertiliser.

There is also growing demand for hydrogen by companies anxious to harness its properties as an effective means of storing power. But none of these applications for hydrogen compare to its extraordinary potential as a viable clean energy fuel for transportation ― particularly in trucks, airplanes and ships.

These essential means of transportation are difficult to decarbonise due to the weight of batteries and their inability to hold sufficient charge for long-haul trips. Hydrogen, however, offers a much lighter alternative as a clean-burning fuel that would go a long way to eliminating carbon emissions in the transport sector.

Hydrogen investing in Australia: Big players and government investment 

Aside from the smaller-cap companies mentioned above, several major Australian energy companies, including Fortescue Metals Group (ASX:FMG,OTCQX:FSUMF), Origin Energy (ASX:ORG,OTC Pink:OGFGF) and Wesfarmers (ASX:WES,OTC Pink:WFAFF), are now rapidly expanding their investment in the hydrogen sector.

Clearly, if hydrogen is now in the process of realizing its potential as a replacement for oil- and coal-generated electricity, the leading steel, coal and gas producers may be well-positioned to bring about this shift in the energy mix. They possess the requisite financial might and technological/engineering expertise to become dominant players in the hydrogen sector as they assume their role in the transition from fossil fuels to renewable energy.

Aiding this growth in Australia's hydrogen industry is government support. The EU, for example, paid nearly half of the US$23 million cost of Shell’s (LSE:SHEL,NYSE:SHEL) Rhineland project, while Queensland has partnered with Fortescue on a AU$1 billion hydrogen project in Gladstone.

Last year alone saw a doubling in the number of newly announced large-scale hydrogen projects to over 500, as per a Hydrogen Council report. Nearly 75 percent of these long-term plant, port and pipeline projects are expected to be completed by the end of the decade, with 40 percent already funded or under construction.

Meanwhile, the Australian government is in the process of investing AU$1.4 billion in its domestic hydrogen industry as part of a growing global drive towards net-zero emissions. Australia's National Hydrogen Strategy intends to grow this industry and position Australia as a major player by 2030.

Aside from that, Australian Prime Minister Scott Morrison has set out an Australian technology roadmap that intends to pour a total of AU$20 billion into clean hydrogen, energy storage, low-emission steel and aluminium, carbon capture and storage and solar.

In June 2021, Morrison announced a joint hydrogen development program with Germany under which Australia will gain access to highly advanced German hydrogen technology, strengthening Australia's ambitions of becoming a leading hydrogen exporter. This will help Australia build up its capacity to export significant quantities of hydrogen to Germany as part of the European country's policy to reduce reliance on fossil fuels.

Australia will also be partnering with Japan (to develop new hydrogen fuel cell technology and establish the world's first clean liquefied hydrogen export pilot project), Singapore (to accelerate low-emission technologies) and Korea (to collaborate on hydrogen supply chain research and low- and zero-emission technology).

Hydrogen investing in Australia: Long-term outlook

The promise of Australia's hydrogen market is strong — indeed, the Australian Renewable Energy Agency believes the space could be worth up to AU$10 billion annually by 2040, at which time the country would be putting out over 3 million tonnes of renewable hydrogen on a yearly basis.

But putting matters into perspective, proposed long-term investments in transitioning towards hydrogen are still dwarfed by Big Oil's average annual expenditure on developing new fields.

In today's early stages, investors looking to enter Australia's hydrogen space have plenty of choices, whether they want to start with the larger players or try their hand at determining which earlier-stage stocks will be successful.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Harold Von Kursk, currently hold no direct investment interest in any company mentioned in this article.

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