QUESTIONS THAT STILL NEED TO BE ANSWERED

QUESTIONS THAT STILL NEED TO BE ANSWERED

 Rex Minerals’ Extended Feasibility Study (EFS) and new mine plan

 On 25^th May 2015, Rex Minerals put out a short ASX and Media Release that claimed to summarise key findings from its Extended Feasibility Study (EFS).   The need for an EFS arose from Rex’s announcement in August 2014 that, because of its inability to obtain finance, the company intended to investigate a smaller-scale start-up option for Hillside rather than begin with the full-scale operation outlined in the MLP.

 

The community had waited over 10 months for the EFS to be completed, assuming that this study would provide them with detailed information on the new mine plan.

How misplaced this assumption was.

Local community kept in the dark 

1. EFS summary fails to provide answers to key questions

 

• The EFS summary did nothing more than confirm what Rex had intimated in its public statements over the previous 10 months;  namely a change in focus to copper/gold only, a downsizing of the mining operation, transporting the concentrate by road to Adelaide, the decision not to proceed with a filtration plant built at the port, no upgrading of the wharf or jetty and no dual pipeline carrying sea water and slurry between the mine and the port.

 

• The summary failed to provide
  • Any details on the mine plan itself,
  • Any detailed scientific assessment of associated environmental or community health risks
  • Any technical details on how this smaller scale operation could be extended at a later date to cover the full mine plan specified in the MLP.

 

Such a rework is inevitable given that Rex intend to confine their small operations to land they currently own.  This will require significant relocations of WRDs, the tailings dam etc.

 

Even Rex has acknowledged (Quarterly Activities Report for the period ending March 31, 2015) that a “complete rework of the mine plan” had been undertaken as part of the EFS.

 

• Almost three months after the release of the EFS summary, Rex has failed to provide the community with any further information.

 

 

2. When will the community be given the information they need?

 

• The company has given no commitment to release fully documented and technically substantiated details (including environmental assessments) on the smaller mine plan. In fact,  a statement by a company representative claimed that “Any information regarding the mining operations, environmental management, etc. is made publicly available in the approvals documents, the Mining Lease Proposal, PEPR, compliance reports etc  (E Dearlove, email to Joy Wundersitz, 6/6/2015).

 

• Does this mean full disclosure will not occur until after the Government has concluded its approvals deliberations?

 

 

3. No information on the new mine plan provided to Government

 

• DSD has publicly acknowledged (The Stock Journal, ^th July 2015) that

“government had not been provided with the extended feasibility study or any other information that had not been publicly released by Rex.  It is also yet to provide specific details on any alternative options for the Hillside project”. 

 

• As a result, DSD has had to write to Rex seeking “a detailed assessment of the consistency of the proposed smaller scale start up” … (email to YPLOG member from DSD representative, 16/6/2015).

 

• It seems unbelievable that Rex has failed to keep the Government fully informed of what it intends to do at Hillside.

 

• If it has been tardy in providing relevant information to the Government agency responsible for approving this changed start-up, where does that leave the community? What does this say about Rex’s willingness to engage in open and frank communication with the community?

 

 

Questions that need answers NOW

 

1. Will the Government allow Rex Minerals to commence mining without need to obtain waivers over all land within their Mining Lease

 

• At a public information session at Ardrossan on 16^th February 2015, DSD representatives indicated that Rex may be given approval to begin mining operations on Hillside land they already own, without the need to obtain waivers of exemption on five farms within their Mining Lease which Rex have been unable to secure.

 

• This position has since been reinforced by the Minister for Mining. Resources and Energy, Mr Koutsantonis, in a letter to the Member for Goyder, Mr Steven Griffiths (21/6/2015). In that letter, the Minister states “The Mining Act does not require that all waivers necessary for a mine over its lifespan are in place ahead of the commencement of any operation of the mine”.

 

• How can the Government justify this decision?

 

• It places the five farmers whose land sits within a Hillside Mining Lease but who have refused to sign a waiver in an untenable position. They do not know when their land will be required – whether in two years, five years, ten years or never.  This uncertainty makes it impossible for them to undertake any future planning for their farming business and exacerbates the considerable stress and anxiety these families are already subject to.

 

• This decision is, we believe, against the intent of S 9 of the Mining Act – namely that waivers over all exempt land within a Mining Tenement  must be obtained before mining can commence anywhere within that tenement.

 

• Any decision by government to allow Rex to commence its small start-up operation without obtaining all waivers for all land within its mining tenement is totally unacceptable.

 

 

2. How will the mine plan be reconfigured to sit within Rex owned land?

 

• Relocation and reshaping of Western waste rock dump and tailings dam?
• Where exactly will this WRD/Tailings dam be located (relative to Reddings Road etc)?
• Will it be reshaped, and if so, where will the Tailings Dam sit in relation to its boundaries?
• How safe will any redesign now be? What technical proof is there of structural integrity?
• What are the environmental implications?
• How will it be expanded to accommodate the full scale project?

 

• How many open pits? 
• Where will the open pit be?
• How big and deep?
• Will the pit still be located within 400 metres of nearby farmland, thereby requiring Rex to obtain waivers over land they do not currently hold?
• What are the implications for rehabilitation?

 

• What happens to the other WRDs

Will there be substantial increases in the size and scope of the WRDs to the SE and East of the pit to compensate for changes to the Western WRD?

• how high will they be,
• what area will they cover,
• what are the new environmental risks of water run-off and underground seepage of contaminants into St Vincent’s Gulf
• what are the implications for dust generation?
• If the NE WRD has been relocated or changed, what are the noise, light, dust implications for Rogues Point and farmland to the north and NW of the mine site?

 

• How will high concentrations of uranium be dealt with?
• Given that the amount of material now being excavated will be smaller and that (as we understand) high concentrations of uranium tend to be co-located with high copper concentrations, how feasible is Rex’s intention to ‘blend’ material with high and low levels of uranium to achieve an overall average for uranium of 57 ppm? If this average can no longer be achieved, what will be the revised average uranium content and what risks will this pose to the local community?

 

• Rehabilitation 
• What are the implications of this new plan for Rex’s stated rehabilitation plans?

 

• Sea-water intake
• Rex notes Hillside will still require sea water for the mining operation.
• With no sea water intake at the Ardrossan port, will Rex need a new sea water intake, where will it be located and what will the environmental risks be?

 

• Road transport

The decision to truck the concentrate to Adelaide by road inevitably means more traffic on the already inadequate Yorke Highway.

• What size trucks will be used?
• How will the concentrate be contained and what are the environmental risks if an accident results in spillage of concentrate?
• In total, how many more trucks/vehicles will be using the  highway:  ie
  • How many trucks per day carrying ore concentrate (2 trips per truck – down and back)?
  • How many trucks and service vehicles carrying equipment, supplies etc to the mine (down and back)?
  • How many vehicles carrying workers to and from the mine? etc
• What are the implications for road safety?
• What are the implications for road maintenance costs?  Who will bear those costs?

 

• Approvals for the Port Adelaide component?

If Rex now plan to ship the concentrate to Port Adelaide, what approvals will be required from the Port authorities to allow this to happen?

 

 

Shifting the goal posts

 

The Mining Tenement document stated the PEPR had to be ‘consistent’ with the original MLP.  At the time, YPLOG disputed DSD’s interpretation that ‘consistent’ did not mean ‘the same as’.  This allowed DSD to indicate Rex could get approval for the small start up without getting waivers over all land required for the full scale operation.     As noted earlier, this is unacceptable and not, we believe, in keeping with the intent of S9 of the Mining Act 1971.

 

Now the Government seems to have gone even further. Instead of the word “consistent’’ it is now using the term “in scope” or “beyond the scope of”.   This leaves the way open for Government to claim that the only part of the new plan that is ‘out of scope’ is the plan to truck the ore concentrate to Adelaide.

 

As stated earlier, it is highly likely that a number of elements of the new plan are NOT consistent with the original MLP, including, but not limited to:

• A new sea water intake
• Relocation and change in siz,e location and height of the Western WRDs and its associated tailings dam
• Substantial changes in size, location and height of other WRDS to the SE and E of the pit
• Change in pit location/dimensions
• Changes to the location of the crushing/processing plant

 

 

What YPLOG believes should happen in the interest of open, transparent decision-making

 

• The Government must require Rex to obtain waivers overall farm land within their Mining tenement before any approval is considered for the small-scale start-up. Alternatively, the Mining Tenement boundaries must be redrawn to exclude any land over which Rex do not currently hold waivers.
• Full details of the new mine plan, including detailed technical assessments of any environmental and community health issues and an adequate period for public scrutiny of the new plans must be set.
• This must occur prior to any DSD approval being given.
• Given the number of inconsistencies between the new and original plans, Rex must be required to present a new or amended MLP (including further public consultation).
• If subsequently approved, the set of conditions attached to the  original MLP must be completely reassessed
• A new rehabilitation plan must be derived

YPLOG Committee

21^th August 2015