By Ian Scrimgour, Senior Executive Director, Northern Territory Geological Survey
The Northern Territory is increasingly being recognised as one of the world’s most prospective destinations for critical minerals exploration and mining.
Western Australia is widely acknowledged as the powerhouse of Australia’s resources industry, but recent investment and analysis has uncovered the potential emergence of another frontrunner.
Recent months have seen an uptick in investment and project activity in the Northern Territory, helping the Territory establish a place for itself in Australia’s resources landscape.
In the Fraser Institute Annual Survey of Mining Companies, the Northern Territory has ranked in the top three jurisdictions globally for its mineral potential in the past two surveys, and is also sitting in the top ten globally for investment attractiveness. This recognition of the Territory’s exploration potential has been accompanied by a boom in exploration expenditure in the Territory, as well as a doubling of the land area under granted exploration licences since 2018.
The Australian Bureau of Statistics’ (ABS) figures show that in 2023, more than $228 million was spent on private sector mineral exploration in the Territory, equalling the record figure that was set in 2011. A record March 2024 quarter in the Northern Territory has rolling annual expenditure now sitting above $230 million for the first time.
Analysing growth
The figures show growth in exploration is particularly driven by critical minerals, with exploration for other commodities as defined by the ABS – which includes all critical minerals except nickel, cobalt and mineral sands – hitting a record $106 million in 2023.
Critical minerals exploration was substantially higher in the Northern Territory than in any state except Western Australia, driven largely by booming lithium and rare earths exploration.
The resources sector is already a key contributor to the Northern Territory’s economy, especially through world-class mines such as McArthur River, Tanami, Gove and GEMCO. But it is demand for the critical minerals needed for the energy transition that is driving most of the current boom.
The Territory is already home to one of the world’s largest manganese mines, has a world class rare earths mining and separation project approaching development, and has Australia’s only lithium resources outside of Western Australia.
Furthermore, thanks to recent exploration successes, the Territory now has Australia’s largest known resource of graphite and a rapidly expanding pipeline of critical minerals projects.
The Territory has defined resources of 17 critical minerals (minerals on the Australian Critical Minerals or Strategic Materials lists), with demonstrated geological potential for a further 12.
In the past year, graphite and gallium have been added to the Territory’s critical minerals list. This follows the announcement of Australia’s first gallium resource at the Transition Minerals’ Barkly rare earths vanadium project, and the discovery of Australia’s largest graphite resource at Kingsland Minerals’ Leliyn project near Pine Creek.
Graphite is a critical material for battery anodes, and given recent graphite export restrictions imposed by China, this expands the Territory’s potential to be a reliable supplier of materials to the global battery industry. Gallium is critical for LED screens and semi-conductors and is subject to recent Chinese export restrictions.
Importantly, the Territory’s known mineral endowment is only a fraction of what is likely to be found, as a significant part of the Territory’s land mass of around 1.4 million square kilometres has not been systematically explored.
Investing in the Territory
With its high geological prospectivity, the opportunity for further resource discoveries and development in the Territory is immense.
The Territory Government has been backing exploration through the $9.5 million per year Resourcing the Territory program, which funds new pre-competitive geoscience by the Northern Territory Geological Survey (NTGS) to attract and de-risk exploration investment and provides grants to co-fund exploration.
A recent outcome evaluation report by Deloitte1 has shown that the Resourcing the Territory initiative – first introduced by the Northern Territory Government in 2018 – has helped significantly boost investment in resources exploration in the Territory.
The report covered the first four years of the program and documented multiple case studies that demonstrate that pre-competitive geoscience, legacy data capture and exploration grants led to substantial new investments in the Northern Territory, including investments from major mining companies through joint ventures and partnerships.
An example of the impact of these programs is collaborative work undertaken by Geoscience Australia and NTGS in the previously poorly-explored Barkly Tableland region east of Tennant Creek. This included a diverse range of pre-competitive geoscience programs and substantial upgrades of geophysical data to support exploration targeting in the area. This directly led to more than 100 new exploration licence applications by the industry since 2018, spanning more than 50,000km2, largely targeting copper-gold and sedimentary copper deposits.
A number of majors are now active in the areas, including South32, who have farm-in agreements worth $25 million with Encounter Resources’ tenements in the eastern Barkly Tableland.
Deloitte found that “investment into pre-competitive geoscience is one of the most significant things the Territory Government can be doing to de-risk investment and increase the possibility of successful resource projects contributing to the Northern Territory economy” and that Resourcing the Territory has delivered on that aim.
The report comes as the recently released Fraser Institute Survey of Mining Companies2 showed the Territory ranking near the top both in Australia and globally for how its geological database encourages investment.
In July 2022, funding for the Resourcing the Territory program increased from $6.5 million to $9.5 million per year, and was made ongoing, signalling the Territory Government’s long-term support for the sector. The Northern Territory has now joined Western Australia as one of the only two jurisdictions in Australia to commit ongoing high levels of funding to support the exploration sector.
An important component of the Resourcing the Territory program is the Geophysics and Drilling Collaborations Grants Program, which is now funded to at least $3 million per year and provides co-funding for selected exploration programs, including greenfields and brownfields drilling, regional geophysical surveys and innovative exploration targeting.
In June 2024, the Territory Government announced that a record 41 projects from 29 companies had been awarded a total of $4 million in grants as part of the 2024/25 of the grants program.
This year’s program includes a new ‘Advancing Critical Minerals’ category, which will see the Territory Government co-fund selected projects to re-analyse existing datasets for critical minerals, or to undertake early-stage test work on the metallurgical recovery of critical minerals.
The strength of exploration is underpinning an impressive pipeline of mining developments, with 18 mining projects in various stages of the development process.
Territory project pipeline snapshot
Combined, these projects represent a combined capital expenditure of $8.7 billion with the potential to create up to 4,250 jobs in construction and up to 3,100 jobs in operations.
The Tennant Creek region is seeing a revitalisation in activity, with two projects currently in construction, including the new gold plant at the Nobles Nob mine site that is expected to underpin the recommencement of a significant gold and copper mining industry in the field.
A flagship critical minerals project for the Territory is Arafura Rare Earths’ Nolans project, which is steadily moving towards final investment decision. Arafura is now fully permitted to establish Australia’s only integrated mine and rare earth separation plant, which is set to be located north of Alice Springs.
The Federal Government has recently committed concessional debt finance of $840 million to help deliver the project, with further support for debt funding from export credit agencies in Germany, Korea and Canada.
The Nolans project represents a major step in the Territory’s transition from a ‘dig-and-ship’ mining jurisdiction to having domestic downstream processing of critical minerals.
It is not just Arafura that is looking at downstream processing in the Territory. Castile Resources has commenced approvals to produce high-purity copper metal, cobalt and gold from the Rover 1 project near Tennant Creek.
Avenira is progressing a feasibility study on a lithium iron phosphate cathode production facility at the Middle Arm Sustainable Development Precinct near Darwin, sourcing phosphate that is to be mined at its Wonarah site. In addition to this, Tivan is also investigating production of vanadium electrolyte at Middle Arm, from product initially sourced from its Speewah project in Western Australia.
The Middle Arm Sustainable Development Precinct has the potential to be one of Australia’s leading critical minerals processing hubs – located close to Asian markets and with access to low emissions energy and a carbon capture and storage hub.
Opportunities exist for the expansion of critical minerals processing at Middle Arm to include commodities such as magnesium and graphite, with large undeveloped resources occurring nearby.
The Territory Government also sees a potential future for downstream processing of lithium in the Territory, despite the substantial falls in the global lithium price in the past year that have placed many lithium operations under severe stress.
The Territory’s only lithium operation at Core Lithium’s Finniss project near Darwin suspended mining in early January due to the dramatic fall in the lithium price, but Core Lithium is continuing exploration activities in preparation for a restart when market conditions allow.
The effort to grow the Territory’s resources sector extends beyond Resourcing the Territory. In December 2023, the Territory Government agreed to all recommendations of the final report of an industry-led Mineral Development Taskforce and released its implementation plan to help prepare, build and develop industry.
An immediate priority was to replace the Territory’s profits-based mineral royalty scheme with an ad valorem system that is simple, competitive and modern, to attract the investment needed to grow the Territory’s resources sector. The new scheme includes a tiered structure to provide an incentive for downstream processing and commenced on 1 July this year.
With its government investment and strong project pipeline, the Northern Territory is quickly cementing itself as a strong player in the nation’s resources and critical minerals industry.
Featured image: ungrim/shutterstock.com
