The minerals and energy industry of Victoria:

• Produces more than 65 million tonnes of coal per year;
• Produces about 4 tonnes of gold per year;
• Produces 85% of Victoria's electricity;
• Has an annual turnover in Victoria of more than $600M; and
• The mining industry alone directly employs more than 5,000 Victorians (and more than 10,000 indirectly), the majority of these being located in regional Victoria.

Safety

The safety performance of the Victorian mining industry is a paramount concern of the Council. Significant improvements have been made over recent years but unfortunately there was one fatality during 2000/01 and the lost time injury frequency rate was 8.8, which is almost identical to the national figure for the same period.

The Council believes that that even with an increased focus on the importance of safety in our mines, our performance can still be improved and our mines made safer for our workforce. Our aim is to have an industry free of fatalities, injuries and diseases.

Employment

The mining industry of Victoria contributes significantly to the economic well being of the State, employs a significant number of people in regional Victoria and contributes more than $600M to the Victorian economy each year. The entire minerals and energy industry in Victoria contributes more than $5B.

Employment in the Victorian mining industry is 3200 direct mine and exploration employees. These employees are almost entirely located in regional Victoria. National and international mining company head office staff in Melbourne number in excess of 2000. Therefore, with a modest multiplier of 2 the total labour supported by the mining industry in Victoria equals 10,000 people. The quarrying industry employs another 1500 direct employees.

Brown Coal

Exploitation of the State's vast brown coal resources continues to provide the bulk of the energy for electricity generation. The three Latrobe Valley open pit coal mines have increased production following their privatisation. Production in 2000/01 was about 65 million tonnes. The long-term prospects for these operations remain firm.

The brown coal mines in the Latrobe Valley are three of the largest mines in Australia. The mines coexist comfortably with the local communities and have well-developed environmental management plans. In a national context, the mines are a credit to Victoria. The brown coal resources of the state provide the fuel for more than 85% of Victoria's electricity.

The Loy Yang mine is the largest producer with 30 Mtpa, Hazelwood produces 19 Mtpa, and Yallourn 16 Mtpa. A fourth mine at Anglesea operated by Alcoa produces about 1.0 Mtpa.

Development of the Maryvale field at Yallourn is well advanced. Hazelwood are currently preparing detailed plans for the expansion of its operations near Morwell.

Gold

The gold mining industry is a nationally significant industry. It produces $4.5B of export income being the second largest contributor after coal to our balance of trade. Victoria is a relatively small player at present although the goldfields of the last century remain some of the most prospective areas for gold developments in Australia. Victoria has huge potential to contribute significantly to the gold industry. The outlook is positive and companies are continuing to explore and existing mines are continuing with plans for development. Gold production in Victoria for 2000/01 was about 122,000 oz (3.8 tonnes). Of this 111,000 oz were produced by Stawell Gold Mines.

Stawell Gold Mines continue to develop the underground resources of the Magdala mine and is continuing to add to the reserves. The mine has the prospects of increasing production over an extended life.

The second most significant gold producer in Victoria is the Fosterville mine operated by Perseverance (10,000 oz in 2000/01). This company has recently restructured the Board and raised $5.7M to explore the potential of developing the deeper sulphide gold bearing resource identified at Fosterville. Mining of the oxide ore at the mine ceased in 2001.

Bendigo Mining continues to explore and development of the underground mining operations below the city of Bendigo recommenced in 2002. The gold resource at Bendigo is huge and the operation has the potential to become one of the largest in Australia.

Murray Basin Mineral Sands

The development of the titanium minerals (rutile, zircon and ilmenite) in the Murray Basin continues to attract significant national and international attention. The first mining project commenced operation in 2001. The Murray Basin Titanium mine at Wemen, near Robinvale sends the concentrate to a dry separation plant at Thurla, near Red Cliffs for processing. The separated minerals are then transported to Portland for shipment overseas.

Other projects in Victoria being reviewed at present include the huge Douglas project south of Horsham and the KWR project near Ouyan. Basin Minerals' Douglas project is currently proceeding through a feasibility study and an EES for project approval. A decision on the project is expected during 2002. The Iluka KWR (Kulwin, Woornack & Rownack) project is being studied and a full feasibility study into the commencement of production is expected to start shortly.

The Murray Basin is estimated to have an inground resource of mineral sands with a value in excess of $13B. However, the real value of the mineral sands comes from the down stream processing. Victoria is ideally placed to become the centre of these developments in the Murray Basin but strong competition from Broken Hill and from South Australia is expected.

Other Minerals

Base metal projects that are under investigation in Victoria and include the reopening of the copper-zinc mine at Benambra and a redevelopment of the antimony mine at Costerfield. The Benambra study is being undertaken by Austminex who are looking to redevelop the mine and reprocess the tailings in an operation that will revitalise the NE of Victoria. The Costerfield exploration is being undertaken by AGD.

Gypsum mining in the Murray Basin has been a long term industry with numerous small mines operating. The annual production is about 0.5 Mt.

Kaolin mining is also a long term industry with annual production of about 200,000 t.

Unimin operate a small feldspar mine near Beechworth, which produces about 50,000 tpa for use in glass manufacture.

Peat is also a mineral that is produced, mainly as a soil conditioner. The newest operation is run by Biogreen at Swan Marsh.

Exploration

Victoria remains very prospective with the potential to find significant gold deposits, mineral sands deposits, base metals and oil and gas.

Private exploration expenditure during 2000/01 in Victoria was $32.7M, down from $33.8M the year before.

The interest in Victorian exploration was demonstrated in July 2001 when almost 100 exploration professionals attended the Council's annual exploration workshop in Ballarat. The main focus remains gold although other minerals are also receiving attention.

Access to land remains a key issue for exploration. The potential of Victoria is acknowledged and we have some of the best geological data (from the Geological Survey) although, the perception in the industry, nationally, that Victoria does not welcome exploration and mining is an issue that we continue to confront.

Native Title

The Council continues to meet with representatives of the Mirimbiak Nations Aboriginal Corporation and the State to develop a project consent deed for land access in Victoria, we already have a protocol Section 31 deed for Victoria.