Adelaide Hills alive with Hillgrove’s copper ambition
- 25 November 2024
Bob Fulker is back in Adelaide and enjoying life again as a copper producer. “Where does it fit into critical minerals? Without copper, you can't do the rest,” he told MinterEllison’s Andrew Corletto at IMARC 2024.
Fulker joined ASX-listed Hillgrove Resources as managing director only a few months ago after spending about six years as chief operating officer at Australian gold heavyweight Evolution Mining.
Before that he was in the same role at Adelaide-based OZ Minerals, a copper and gold producer acquired by BHP in 2023.
In a decorated career spanning more than three decades Fulker also spent about 8.5 years running a number of BHP and Xstrata (now Glencore) operations in Australia.
Now he’s tasked with growing the life and profitability of a copper mine only 55km from a city centre and which was turned back on earlier this year after a hiatus while it shored up a modest underground reserve position to support the restart.
Fulker said copper was being mined in the Adelaide Hills back in the 1860s and Hillgrove’s Kanmantoo operation had a plus-50-year back story. Despite its longevity exploration at depth had been limited and Fulker saw a life for Kanmantoo beyond the four-year nominal restart schedule.
Last month Hillgrove started down that road by posting a hefty increase in mine resources to circa-150,000 tonnes of copper (up from about 70,000t previously) plus a handy 83,000oz of gold. Fulker said at the time 2025 would be about the drill bit – converting resources to reserves – and “earning the right to grow”.
At IMARC he told Corletto, a MinterEllison partner in Adelaide, Hillgrove had achieved annualised production of about 12,000t of copper from its over-sized Kanmantoo mill and was aiming to ramp that up further.
“We have a 3.6 million tonne [per annum] mill. We’re only planning to put 1.4-to-1.8Mt through it,” Fulker said.
“But we didn’t have to capitalise that. Our capitalisation didn’t need that $300-or-400 million to be covered. Our capitalisation only needed the underground development, the restart, the recommissioning, etc, which makes for nice economics.”
Copper at US$4-to-$4.30/pound was also nice.
“Anyone with any age on them will remember a lot worse commodity prices,” Fulker said.
“We should be able to mine at these prices. But I always believe that it's going to go up. It's gone up for the last 20 years.”
Strong demand growth is forecast for the red metal, driven by global urbanisation, electrification and decarbonisation. Meanwhile, new supply is being constrained as project timelines extend and capital intensity grows while major existing mines deal with declining head grades.
“We have a macro-economic situation at the moment where the average grade that we're mining has gone down by 40% since the mid-90s but our desire to use copper is growing,” Fulker said.
“Without copper we cannot get the electricity around the globe. Without copper we can't build the houses and the requirements for the population and the urbanisation of the population.
“So from my perspective, copper is that underpinning commodity that is required to actually get us to where we need to get to.”
Hillgrove is among a mere handful of listed copper producers in Australia.
Fulker said even the best copper projects could not move forward quickly without urgency on the regulatory side. But miners had to be miners and be prepared to take some risks, too.
“If you look at where we are at with current systems there are some regulatory systems which actually help the process and there are some which don't necessarily help and are not necessarily there to speed the process up,” he said.
“I’m not talking about speeding it up to make poor decisions from an environmental or a social perspective. I'm saying, we have enough data to make an appropriate decision to move forward.
“Different states are different. Then we have got the federal [government] over the top. Sometimes they are actually in competition with one another.
“I'll put a plug in for South Australia. It's very easy to talk and to work with the South Australian departments, and they're very friendly when you try to get things moving quicker.
“When you look around Australia and you see issues occurring which put in question the validity of some decisions that puts the wind up the investment community as well.
“We like stability. We like to know that things are going to be the same today and tomorrow because then we can make good decisions.”
Sometimes, though, quick decisions had to be made “with limited knowledge or not all the information you'd like”, Fulker said.
“From an engineer's perspective that can be difficult to do. It’s difficult not to have all the answers before you make a recommendation.
“There have been a couple of times in my history where we've made decisions to move things fairly quickly, but they're all articulated with a risk perspective.
“Sometimes the threat is too great and you don't move it forward and other times the opportunity is such that you do move forward with speed and that's how you bring things to the market quicker.
“As technical people we do try to analyse a topic to the nth degree because we want to find the right solution.
“Sometimes that right solution is actually there in front of us before we have all the data. But it's hard to move past that. It's then how we actually articulate that risk … to get that project moving forward.
“It's very easy to not make a decision. It takes courage to actually make a decision which is the right decision for the future.”
