Two more mines as Snapper sands double in Size MINERAL sands...

Two more mines as Snapper sands double in Size

MINERAL sands miner Bemax Resources has flagged a near-doubling of its Snapper mine development in the northern Murray Basin of western NSW, which could boost its planned annual production from the region to 1 million tonnes of heavy mineral concentrate.

This would be up from the 600,000 tonnes currently planned.

Bemax has also started long-term planning for further developing its large resource base in the Murray Basin, which could result in the construction of two more mines.

That could open the way for possible co-operation with its Murray Basin rival Iluka, which has operations to the south in Victoria.

The idea would be to use Iluka's infrastructure, and possibly ship Bemax product out of Portland.

Bemax is sitting on the largest mineral sands resources base in the Murray Basin with 85 million tonnes, compared with Iluka's 53.8 million tonnes.

"We are thinking right now that we can support another two mining operations, so we are looking at being a four-mine operation in the Murray Basin for about 35 years," managing director Tony Shirfan said.

Bemax produces the titanium raw materials rutile and ilmenite, which are mainly used in pigments, as well as high-value zircon, used in ceramics.

Early last year Bemax brought into production its $180 million Ginkgo dredge mining operation in the Murray Basin, which is sending over 525,000 tonnes a year of heavy mineral concentrate to a minerals separation plant at Broken Hill, some two hours up the road.

Bemax is aiming to increase mine production to 600,000 tonnes by bringing into production in the first half of 2009 the nearby higher grade Snapper discovery and operating both dredge mines in tandem. Bemax has discovered an extension to Snapper, dubbed Snapper East, that would justify an expansion to 1 million tonnes.

"We are considering starting immediately with close to 1 million tonnes a year instead of 600,000 tonnes," Mr Shirfan said. The cost increase would be marginal, possibly adding less than $20 million to the $105 million Snapper development cost.

The expansion would allow Bemax to increase output of finished product at Broken Hill while continuing to ship intermediate production to its Bunbury processing plant in Western Australia.

Bemax sends its Murray Basin product north to Broken Hill for processing, with some low-value ilmenite railed to Melbourne for sale to China, and finished leucoxene shipped to customers out of Port Adelaide. Leucoxene is mostly rutile.

The Broken Hill plant is only able to process the high-value zircon and rutile into an intermediate product that needs to be shipped out of Adelaide to Bunbury for further processing.

A key benefit of the Snapper expansion is that Bemax is spending $45 million to upgrade the Broken Hill plant so that it can produce finished zircon and rutile without having to ship it to Bunbury, but the Snapper East expansion now gives Bemax the option of continuing to maximise the Bunbury plant with Murray Basin feed, rather than relying on its more mature Western Australian operations.

The new Gwindinup mine in Western Australia is mainly to replace existing operations, making the Murray Basin key to Bemax growing its production. The plant upgrade at Broken Hill is due to be completed by the end of next year.

"Bemax will be a bigger company with two points of delivery for the product," Mr Shirfan said.

Last month Bemax completed a $US175 million debt raising for the Snapper mine development and plant upgrade.

Bemax's Murray Basin resources extend towards the south and actually butt up against Iluka's northern Kulwin deposits.

Mr Shirfan said that could create opportunities for Iluka and Bemax to co-operate on new developments, especially if it made sense for Bemax to start shipping some production south rather than north to Broken Hill: "We are open to suggestions but we have enough resources of our own that we are going the Bemax route alone. There should be at some point in time some dialogue with Iluka."

Bemax is 34 per cent owned by its major customer, Saudi Arabia-based Cristal