$820 million spend: Jobs, growth to flow from Cadia mine expansion plan

Extra jobs and growth at the Cadia mine will be created under a plan to expand above-ground plant and underground materials handling.

On Thursday Newcrest Mining revealed it would push ahead with plans to spend $820 million on upgrading the Cadia mine.

It released the results of a pre-feasibility study which backed the expansion plans.

That would involve spending $80 million on plant and processing works while a further $740 million would be spent on creating the next mining caves.

A company spokesman said the cost of the plant expansion work had been cut by 80 per cent from a forecast two years ago.

He said it would be achieved by upgrading equipment to improve efficiency rather than installing a new processing line.

The plan will move to the feasibility stage which is due to be completed in 2020.

The spokesman said the company had not yet determined how many extra jobs would be created.

“There will be more jobs during the construction of the next Macro block [mining caves] which will take several years to complete,” he said.

Newcrest managing director and CEO Sandeep Biswas said the works would increase the output at the mine by more than had been originally planned.

“Two years ago we set out to expand Cadia to 32 million tonnes per annum (mtpa) for an expected cost of $US310 million [$A425 million], today we announce expanding the plant to 33mtpa for $US58 million [$A80 million] with the potential to grow to 35mtpa,” he said.

“The study has delivered a $US252 million [$A345 million] saving and an additional 1mtpa of throughput capacity.”

The study found plant capacity of 35mtpa could be achieved through “future potential de-bottlenecking” of the production process.

The pay-back time for the investment is eight years.

The report said Newcrest would apply for approval of the upgraded project once the investigation into its northern tailings dam wall slump was completed and studies to confirm a long-term solution for placing tailings had been finalised.

It said the combined capacity of the Cadia Hill pit and the southern tailings dam would be sufficient to take tailings through to 2029 at the increased processing capacity.

“The environmental assessment work will encompass noise, air quality, site water balance, road transport, Aboriginal heritage and biodiversity. Some of this work is underway,” it said.

Power for the expansion will be provided through the duplication of the power line from Orange to Cadia and minor substation upgrades which are underway.


Output from the Cadia mine was 12 per cent below what was a forecast after a year where production was disrupted by earthquake-related activity.

The Newcrest Mining full year financial results released on Thursday indicated the mine had rebounded after having to react to the slump of the northern tailings dam wall and needing to pump tailings into the former Cadia Hill open pit.

A spokesman said talk of Cadia’s future being on shaky ground due to the earthquake activity in a recent Financial Review newspaper article was unfounded.

“That’s just speculation,” the spokesman said.

“We have no doubt that Cadia will continue to operate.”

He said Cadia’s output for the financial year was “12 per cent below” what was forecast a year ago.

“Newcrest as a group was able to recover and be only 2 per cent below original guidance,” he said.

The spokesman said the life of the mine based on existing resources was 45 years.

Newcrest managing director and CEO Sandeep Biswas, said Cadia had achieved milestones this year.

“The Cadia East panel cave continued to expand and the operation achieved its target of an annualised production rate of 30 million tonnes in June 2018, a key milestone for the operation,” he said.

The annual report said Cadia’s financial results were “impacted by the seismic event” that occurred in April 2017 and the embankment slump at the northern tailings dam in March 2018.

“Despite these challenges Cadia rebounded and finished the year strongly with its June 2018 mine production and mill throughput at an annualised rate of exceeding 30 million tonnes per annum.”

It generated $948 million in pre-tax cash flow.


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