The King Island scheelite mine has a long and distinguished history.
The deposit was first discovered in 1911 when a prospector named Tom Farrell searched the area for tin. He soon realised that the outcropping mineralisation found near the beach was in fact scheelite, and that a significant deposit existed under shallow sand cover.
In 1917 the King Island Scheelite Development Company N.L. was incorporated, and a plant capable of treating 200 tonnes of ore per week was constructed. Operations were however closed in mid-1920, following a collapse in tungsten prices.
In 1937 King Island Scheelite N.L. was formed and a larger plant capable of treating 500 tonnes of ore per week was erected in 1938. This operation required ore to be mined essentially by hand, but with the onset of World War 2 things changed due to tungsten’s significance to the war effort. With Commonwealth Government assistance, power shovels and 6 tonne trucks were installed, together with a new mill that increased annual ore processing capacity to 129,038 tonnes in 1946.
In 1947 the company voluntarily wound up, and was reconstructed as King Island Scheelite (1947) Ltd. The Korean War of the early 1950s helped to maintain the price of tungsten at healthy levels, and the creation of strategic stockpiles in the US and other countries also meant that market conditions were good for producers. After the war and following the completion of building the stockpiles, the price of tungsten declined, ultimately forcing the King Island mine onto a care and maintenance basis in August 1958. The mine reopened on a limited basis in early 1960, with again the Vietnam War helping to support prices during the 1960s.
In 1969 King Island Scheelite (1947) Ltd was absorbed into the Peko-Wallsend group of companies, and milling capacity was subsequently increased to 300,000 tonnes per annum. Over time, capacity eventually rose to 420,000 tonnes.
Mining was undertaken solely by open cut methods until October 1972, when underground mining commenced at the Bold Head mine, located approximately 3 km north of the Dolphin open cut. In June 1973 underground mining commenced at Dolphin, and in October 1974 production ceased from the Dolphin open cut.
By this time the company owned township of Grassy had become a thriving town, with a population of approximately 700 people. Facilities available included a picture theatre, tennis, basketball and badminton courts, a nine-hole golf course, squash courts and an indoor heated swimming pool. The town was entirely dependent on the mine.
Following a prolonged period of depressed prices in the 1980s, the King Island mine followed many western tungsten producers, and operations closed in 1990. The site was fully rehabilitated by North Mining (now part of Rio Tinto) who had acquired Peko-Wallsend, all processing facilities and much of the infrastructure was removed, the company owned town site was sold, and the open cut mine was allowed to flood.
As the mine was always expected to eventually re-open, North Mining lodged mine drawings, geological plans, drill core and other information with Mineral Resources Tasmania to facilitate this.
In May 2005, GTN Resources NL acquired the project, and subsequently changed its name to King Island Scheelite Limited (KIS). KIS carried out a feasibility study in 2005/6 based on redeveloping the project by extending the open pit with a sea wall to prevent any water ingress. This mine would feed a gravity based mill processing 600,000 tonnes of ore per annum to produce approximately 3,000 tonnes of WO3 concentrate a year.
In December 2007 KIS entered a joint venture with Hunan Nonferrous Metals Co Ltd (HNC), a major Chinese tungsten producer and processing organisation to progress the Dolphin mine redevelopment. This transaction saw HNC subscribe for shares in KIS, enter an equal share, unincorporated joint venture to develop and operate the mine, as well as provide funding for the project. The development proposal was for an entirely underground mine and a complete Feasibility Study was conducted for this scenario.
This joint venture was terminated on 17th December 2010, following a take-over of HNC by MinMetals. King Island Scheelite Limited now owns 100% of this project. The loan from HNC has been forgiven in exchange for a 2% royalty on future gross revenue (capped at $3.9million).
In 2009, as the price of tungsten was rising, the project was re-examined with underground mining proposed to extract high grade remnant scheelite ore at an average grade of over 1 percent WO3. The over 2 million tonne tailings resource was also examined for possible recovery of remaining scheelite values. The high costs of tailings recovery and of underground rehabilitation during a mining boom in Australia meant that the project was unable to attract funding at that time.
In late 2013 a change in management at KIS prompted a review of the approach to the project. Over the next few years with the tungsten price slowly rising, it was decided to look at a low capital project model. Further laboratory testing was conducted investigating methods of reducing capital and operating costs. These studies are nearing completion and a clear picture is emerging of an open cut mining operation feeding a simple gravity based processing plant that has low capex and opex requirements. It is envisaged that once in production enhancements to the project would be considered as cash flow permits.