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The Olympic Dam Story

Olympic Dam image courtesy BHP Billiton

It’s easy to think that the sheer size of Olympic Dam made its discovery inevitable. Image courtesy BHP Billiton

By David Upton

The discovery of the Olympic Dam mine is a story of innovative geologists who defied conventional thinking, and the corporate leaders who maintained faith in them.

Aircraft were an unusual sight on the strip at Roxby Downs pastoral station, more than 500 km north of Adelaide. In fact, the only real flight activity all year was during livestock musters around March and September, when station owner Tom Allison would be up and down several times a day in his single-engined Cessna.

Pastoralists further south scoffed when he built the airstrip and bought a plane after taking over the property in 1968, but Allison discovered that herding livestock from the air was the only way to work Roxby Downs. The scrappy vegetation on a square kilometre of land might feed six sheep each year. Allison had to cover 2000 km2 to muster his 15,000 sheep. Along with this vast range he had to contend with a maze of red sand dunes that stretched west to east across large areas of Roxby Downs. “It would take me a week on a motorbike to round up 300 sheep in the sand dunes. I could do the same job in 3 hours in a light plane,” Allison says.

Outside of mustering season, many weeks could pass without an aircraft engine drowning out the distant sounds of sheep and native pines in the wind. But things would be different after 5 November 1976, when a twin-engined Baron droned in from the south after lifting off from Adelaide Airport about 90 minutes earlier. Aboard were some of Western Mining’s most senior executives, including the director of exploration, Roy Woodall, the head of mineral exploration in eastern Australia, Jim Lalor, and the most senior man in the company, Arvi Parbo (later Sir Arvi), the chairman and managing director.

The presence of top-ranking company men might normally suggest that a great discovery had been made, but there was no such news bringing this group to Roxby Downs. Parbo, the Estonian migrant who had already become one of Australia’s top businessmen, was always eager to get out of the Melbourne head office and see what the exploration geologists were doing.

Woodall had called a few weeks earlier and invited him on a trip to the Pedirka Basin in the far north of South Australia, where a new oil exploration program had begun. He suggested a stop-over at Roxby Downs station to look at the latest drill core from the company’s copper exploration project.

The company was using a costly drilling rig with a diamond-studded bit to cut a 36.5 mm core of rock to depths of around half a kilometre. Drilling was slow, perhaps 10–12 metres a day. Every day, the driller lifted new core from the deepening hole, broke it into short lengths and placed the pieces in steel trays of U-shaped grooves. He would carefully log the below-ground depth of every section for later inspection by the company’s geologists back in Adelaide. Big mining companies had geologists sitting around on rigs for weeks at a time, but Western Mining could not afford such luxury.

The project was now drilling its tenth exploration hole, Roxby Diamond 10 (RD10), and had still not made a convincing find. The excitement of more than a year earlier, when the first hole discovered sub-economic grades of copper, had long faded. Falling copper prices made the copper exploration program an even greater test of nerves.

However, Parbo had faith in the company’s innovative geoscientists. Their new ideas and expertise had led to major discoveries in each of the past three decades, and he would keep supporting the copper project as long as they recommended.

He did not know that even some of the geologists were starting to doubt the science that had led them to the middle of a region where not even one deep exploration hole had been drilled in an area as big as Tasmania.

A recent PhD by one of their geologists, Douglas Haynes, had predicted that if they could find altered basalts then a copper deposit might be trapped nearby in overlying sedimentary rocks. Instead, the first exploration hole, RD1, found a rock that none of them had seen in all their careers or studies at top universities around the world.

This unknown rock was mostly the jagged fragments of a granite that had once been blown to bits. The explosive force was so powerful that some of the pieces were as big as a family home. The rock had later soaked in iron-rich volcanic fluids at temperatures of up to 400°C.

The rocks were a mystery, but at least this unusual exploration venture had found some copper. Perhaps it might yet find higher concentrations of copper minerals in large enough tonnages to justify a mine.

Lalor clearly recalls the flying visit to Roxby Downs Station. “The company didn’t allow landings on rough dirt strips if Arvi was on board. We normally landed on Lake Blanche, a dry salt lake that wasn’t even recognised as a certified landing strip. The nearest strip we could use on this visit was the one at Roxby Downs Station. This was 30 km from RD10, and we just wouldn’t have time to take Arvi to the drill site and back again. So I asked the drilling foreman, John Emerson, to have a couple of trays of core sample from RD10 available to inspect at the airstrip.

“We landed, and John was there. I looked down the airstrip and there was row after row of core tray laid out. They had carted it all in. I said: ‘John, what are you doing? I told you just to put out two or three different trays!’ He said: ‘Just have a look.’ Well, it was unbelievable. There was 200 metres of core laid out and you could see it was going to go two or three percent (copper). It was just so exciting. I had never seen drill core like that, and most people probably never would,” Lalor says.

An exploration geologist could make a career out of a copper intersection a fraction of the length of this one; 200 metres with shiny copper sulfides was the stuff of dreams.

One of the greatest mineral discoveries ever had sat unrecognised for weeks under South Australia’s far north sky, growing more magnificent by 10 or so metres every day. RD10’s discovery was unappreciated until Emerson arrived at the drill site the previous day with his boss, Eric Steart, the Kalgoorlie-based drilling superintendent who by chance was also in the area. Emerson was no geologist but, as an experienced drilling hand from the company’s mines in Western Australia, he knew the significance of the sulfides now visible over hundreds of metres.

There are many reasons to marvel at Olympic Dam, but none surpass the story of its discovery by an eclectic group of geoscientists at Western Mining, most of whom were in their 20s or 30s. How did they find Olympic Dam, where no-one had previously dared to imagine? It did not even outcrop at the surface, unlike almost every other major mineral discovery in history.

Decades later, it is hard to grasp how radical they were, but a great deal is revealed by the actions of Western Mining’s competitors in the years following the discovery.

Competitors from around the world rushed to explore any available ground near Western Mining’s mineral licences after the spectacular results from RD10 were announced on 18 November 1976. These newcomers spent millions searching for the wrong target because they knew so little about the discovery or the nature of the mineralisation. They did not contemplate that Western Mining’s “pay dirt” was the hard rocks in the geological basement at depths below 350 metres. Everything they had learned about copper deposits told them that Western Mining must have hit its fabulous copper intersections in the shallower sedimentary rocks.

South Australia’s Department of Mines and Energy knew Western Mining’s secret, but was not able to tell the company’s competitors to look deeper. It asked Western Mining to display publicly some core samples from Roxby Downs. The company obliged in May 1979, safe in the knowledge it had already pegged all of the most prospective ground.

Western Mining’s radical break from conventional thinking happened because it was unique among mineral explorers, and even among businesses the world over. In the modern language of the corporate world, Western Mining was an innovator – a Google or an Apple of its time. While it was not in the business of inventing computers and software, the mineral explorer’s leaps of creative thinking were just as spectacular as those behind today’s stars of innovation.

Olympic Dam was the third discovery by Western Mining in 10 years of a type of orebody that was entirely new to the world’s mining industry. The company’s exploration breakthroughs were re-writing the textbooks on economic geology.

Innovation was built into the company from the day it was founded in 1933 by W.S. Robinson, a former business editor of The Age turned stockbroker. He made his first fortune by sponsoring an inventor in Melbourne with an idea to extract discarded zinc from the slag heaps of Broken Hill. Robinson became hooked on the possibilities of creating wealth through science and innovation, and decreed that this principle would be the foundation of his newest company, Western Mining Corporation.

The company began by recruiting the best geological brains it could find, mostly from North America, and began exploration with some strange methods that were mocked by its peers. Western Mining soon earned the nickname “Wasting Money Corporation” because it hired planes to take aerial photos across entire regions that attracted its interest. This practice would become a fundamental exploration method by the 1950s, but was extremely unorthodox at a time when most mining companies did not even have geologists on staff. In those times, exploration consisted of scratching away at an existing orebody until an extension could – or could not – be found.

Western Mining made some great discoveries in the 1950s, 1960s and early 1970s by defying conventional thinking and going wherever science and the imaginations of its geologists told it to explore. But one target still eluded the company – copper, a highly conductive metal that was in demand by an increasingly electrified world.

The search had taken Western Mining’s geologists to wherever prospectors had found copper minerals in any quantity, including some of the most remote locations in Australia. In the early 1970s it tried an entirely new approach. The search would start again, but this time it would be based on theories rather than surface signs of copper.

And so Western Mining’s small team of geoscientists was guided to Olympic Dam purely by their scientific ideas. They had developed some world-first thinking about where to search for copper in some of the oldest rocks in the world. Many of their theories were untested. Some were even ridiculed as the stuff of mad men, but they believed in the science they had pioneered, and Parbo and his fellow directors believed in the company’s scientists. It was a remarkable combination of faith at the individual level and corporate level, the likes of which may never be seen again in the resources industry.

The brilliance of the Olympic Dam discovery is enhanced with time. The world’s biggest miners had all departed the region without success by the end of the 1980s. In fact, it would be 20 years after the Olympic Dam discovery before another economic find of copper was made at Prominent Hill.

Of course, organisations are only the sum of the people who work inside them. This story is really about the people who discovered Olympic Dam. At the top were great leaders like Sir Lindesay Clark, Sir Arvi Parbo, Roy Woodall and Jim Lalor, who shared a faith in geological science, trusted their people and built highly talented teams.

Woodall scoured Australia’s universities for the most brilliant young geo­scientists before they even graduated, and implemented a host of what today’s human resource experts would call innovative talent management programs.

Western Mining’s leaders were also special in the way they pursued goals with the kind of persistence that cannot be imagined in the modern corporate world. They began the search for copper in 1957 and never wavered, despite decades of disappointments and setbacks even before the start of the search for Olympic Dam.

Looking back from here, it’s easy to think that the sheer size of Olympic Dam made its discovery inevitable. But it is sobering to realise that other Olympic Dams might still lie beneath the South Australian outback, their existence unknown because the nearest exploration hole glided by just a few metres away.

David Upton is author of The Olympic Dam Story. This is an extract.