Pretty much agree with most of that post except for the following:
"Gold mining in West Aust is traditionally done on the smell of an oily rag while Iron Ore and Base Metal projects are always full of gold-plated solutions."I agree that costs in Pilbara Iron Ore are "gold plated" because they are world class high grade iron ore deposits with some big infrastructure costs e.g. rail and port (some paid for many times over) as well as operating in a first world country with relatively Australian high wages. Were your comments about base metal projects being "gold plated" referring to nickel sulphide, nickel laterite or to base metal (copper, lead and zinc) sulphide projects? Because from my experience the margins in copper lead and zinc have been non-existent, so I wouldn't call the few WA base metal producers "gold plated" in infrastructure or costs, they are often just as skinny and desperate operations as the gold mines are in low gold price environments.
I don't know who first thought of transporting low grade 1.3-17g/T Au dirt any distance but doubt that was what
@nordesmic was saying, as you point out, that sort of low grade dirt dosen't go anywhere except a mill purpose built on-site to treat it.
Agree with the general thrust of what you are saying that high Australian wages are counter-balanced by the high productivity, large economy of scale and some increasing automation which allows Australian miners to compete with mines in Africa and South America with ten times the size of the workforce but wages only one-tenth to one-fifth of Australian wages. Don't forget though that the automation and autonomous mining only makes sense with large economies of scale, open pit mines with long mine lives, simple geology, a large R&D budget and its still a work in progress, BHP and Rio have been on autonomous trains, loading and trucking bandwagon for over 20 years and its still nowhere near perfected.....
Another unexpected byproduct of Covid19 is that WA is essentially a captive workforce now, due to the impossibility of working FIFO rosters from other states, this means that the existing WA construction and mining workforce is being competed for by iron ore companies, gold miners (at the moment because of high gold prices) and other WA resource projects, and the mining companies can't import labour easily from other states like they could in the last resource boom. Remember the last resource boom? Iron Ore, Oil & Gas, Nickel and Gold were all booming with rampant wage inflation only kept in check by an interstate workforce that was attracted to the industry. Now with travel restrictions that 'safety valve' is not available so I expect that future projects may see some big cost blow-outs and labour shortages. Your point is valid though that there is considerable overlap in skill sets/expertise mining open pit iron ore and open pit gold, so if one sector has high prices and massive profit margins that can have the adverse effect of driving up costs in similar but unrelated mining sectors i.e. the iron ore boom increasing contract mining costs for say a gold industry under margin pressure as we saw a while ago.
I think that you,
@nordesmic and I are actually agreeing on most things but just coming from slightly different perspectives.
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