Port Keats Project, Northern Territory

Rock salt

Minemakers aims to drill test a large seismic structure on the Northern Territory coastline.  It has been interpreted to be a rock salt dome.  If this proves to be the case, conventional solution mining technology could enable the Company to set up a major salt production facility, exporting to the Asian markets.

Background

Marine and onshore seismic surveys of the Bonaparte Basin by the oil industry defined several diapiric structures which have been interpreted as salt domes.  Offshore and some 30kms west, one of them was drilled (Kinmore No. 1 Well) which intersected a salt column over 200m thick, with the well bottoming in salt.  The operator estimated the salt thickness as more than 1,200m as the well attained salt on the shoulder of the dome and 1000m deeper than the top of the structure.

With an interpreted diameter of 5-10km, the Port Keats Diapir potentially hosts up to 150 million tonnes of salt per vertical metre.  The oil explorers estimated the top of the dome to be only about 350m deep.

The Port Keats structure lies under shallow waters adjacent to the coast and its development will require access to land for brine evaporation purposes.  Access agreements will have to be negotiated with the local Aboriginal community.  The initial meeting with Traditional Owners was held in November 2007 and seemed encouraging.  Minemakers is hoping to secure permission to drill in the dry season of 2009.

Minemakers has 100% ownership of a granted Exploration Licence and two Exploration Licence Applications.  The offshore licence covers most of the target.  The others cover most of the low-lying Dorcherty Island where evaporation ponds could be constructed, and a part of the mainland needed for access purposes.

Commodity outlook

This is seen as very positive.  As seawater contains an inexhaustible supply of salt, price is generally set by production cost and transport parameters.  For much of the Asian region, a mix of climatic, topographic and competing land demand problems renders large scale sea-salt production difficult.  Recently, China's levels of industrialization have outstripped its ability to produce salt.  In Australia, it is proving difficult to gain permitting for the large land areas impacted by a sea-salt operation.  This project points to a good future for Australian salt in general and for solution-mined salt in particular.

Cost advantages of solution mining of salt

Australia produced about 10 million tonnes of salt in 2004, and all by evaporation of seawater.  The process is relatively complex, consuming and costly, as seawater contains a mix of dissolved salts.  The production of common salt involves controlled progressive precipitation and removal of other salts by successively pumping the brine to different evaporation ponds.  

The two immediate advantages of salt sourced from salt domes are that the product tends to be segregated and purer, and that the saturated brine pumped to the evaporation ponds contains over 30% common salt, compared with the approximately 3% in sea water: production is easier and impacts on a much smaller area.  

Minemakers' Plans

• Negotiate an access agreement for drilling and potential evaporation pond sites and for a load-out facility.
• It will possibly undertake an airborne gravity survey to better define the target dome.
• Drill one hole to test for the presence and thickness of a salt column.
• Scope capital and operating costs for a major common salt production and export facility.
• Look to an Asian arrangement with trading or consumer partners.