OLYMPIC DAM
AJM is pleased to publish the first of six extracts from David Uptons new book, entitled The Olympic Dam Story.
Over the next year, the serialisation will tell the remarkable story of the discovery of possibly the worlds greatest
polymetallic deposit, which has an in-ground value approaching $1 trillion.
The Olympic Dam story, part one: driven to explore
I
f any company was going to find
Olympic Dam, it was Western Mining.
The Melbourne-based resources company
was unlike any other in Australia and possi-
bly the world because of its extraordinary
willingness to invest in exploration. Through
the 1960s and 1970s, it spent an average of
56% of its annual profits on exploration.
To put that into context, Western Minings
annual exploration budgets in absolute dollar
terms matched those of Conzinc Rio Tinto and
BHP, yet these companies were three-times
and six-times bigger than Western Mining
respectively. This is one of many surprising
facts in a 1975 report by McKinsey & Co.,
commissioned by Conzinc Rio Tinto in a bid
to crack the secret code of Western Minings
exploration success.
Comparisons with industrial companies put
Western Mining in a broader perspective.
Industrial companies invest in research and
development (R&D) in the same way miners
spend on exploration. Apple Inc., which has
earned a reputation as the worlds most inno-
vative company, spent 23% of its net profit on
R&D in 2009, less than half the proportion of
profits committed to exploration by Western
Mining through the 1960s and 1970s.
For all its spending on exploration,
Western Mining was not financially reckless.
Shareholders were patient and for the most
part content to see their companys profits
re-invested in exploration rather then returned
to them as dividends. They had seen the
company make great discoveries and been
richly rewarded by a soaring share price.
The discovery of nickel at Kambalda in 1966
boosted Western Minings share price by a
factor of 10. If Western Mining wanted to
spend nearly all its profits on exploration
and the discoveries kept coming that was
fine with shareholders.
AUSTRALIAN JOURNAL OF MINING
Western Mining was special in one other
way; it was determined to try new exploration
ideas and technologies, even when its
competitors sometimes laughed at it. In the
absence of such boldness and determination,
it is possible to believe that Olympic Dam
a wild idea even by Western Minings
standards might still be undiscovered.
Western Minings aggressive approach to
exploration was chosen very purposefully by
William Sydney Robinson when he founded
the company in 1933. Even more remarkable
was the fact Western Minings leaders stuck
... it soon earned Western Mining the nickname of the Wasting Money
Corporation from bemused onlookers in the Kalgoorlie gold fields.
to this boldly different path for most of the
companys 72-year history. The sense of
corporate purpose was incredibly strong,
thanks in large part to having only three chief
executives after Robinson in its first 57 years,
all of whom were mining engineers.
Robinson was effectively the first chief
executive, although his vast spread of interests
around the world allowed only limited
involvement with the company. Knowing
this, he appointed at the outset a young
Tasmanian mining engineer, Gordon
Lindesay Clark (later Sir Lindesay) as
Technical Managing Director.
Western Minings new exploration
programs began in spectacular fashion.
Robinson hatched an ambitious plan to find
undiscovered gold fields by taking aerial
photographs of vast tracts around Kalgoorlie.
It was originally planned to shoot up to
200,000 square kilometers almost 10% of
the area of Western Australia over two or
three years, with most of the important areas
around Kalgoorlie to be completed by the
end of 1934.
Wing Commander Victor Laws, who
led aerial photography for the British
Expeditionary Forces in World War I, was
hired to implement the plan with military
precision, and no expense was spared.
Two aircraft, The Golden West and The Gay
Prospector, were purchased and extensively
modified for their new task. The De Havilland
Dragons needed a stronger undercarriage
to cope with the outback airstrips and
better-than-average instruments for precise
navigation.
A convoy of trucks supported the survey,
carrying photographic equipment, an
air-conditioned darkroom and three wireless
telegraphic stations. It was a technological
tour de force. Sir Arvi Parbo recalls that it
soon earned Western Mining the nickname
of the Wasting Money Corporation
from bemused onlookers in the Kalgoorlie
gold fields.
u
JANUARY / FEBRUARY 2011 41
 OLYMPIC DAM
t
Unfortunately for Western Mining, the
cynics were right. The aerial photos did not
reveal gold, but vast expanses of soil and
laterite, a weathered, gravelly layer, which
masked the rocks of real interest below.
Australia was an older and far more weath-
ered terrain than other countries where
aerial surveys had yielded results for a
new generation of gold explorers.
Robinson also learned that unsophisticated
prospectors had been far more efficient over
the previous 40 years than anyone expected;
the most promising outcrops of gold-bearing
rock located by the aerial survey had already
been picked over.
The poor results from the aerial photo-
graphic surveys did not discourage Robinson.
He already had underway another great
experiment in which he would recruit the
worlds best geologists to unlock the secrets
still held by Australias goldfields. It seems
an unremarkable plan today, but in the 1920s
and 1930s geology was a still a new science
and regarded as a poor cousin in the study of
natural sciences. It had yet to make an impact
on the mining industry, which relied on the
Author hooked on Olympic dream
AJM reporter Mike Foley spoke with David Upton, author of The Olympic Dam
Story. Upton, a qualified geologist, began his long association with Olympic Dam
while working as a resources writer at the Adelaide Advertiser in the 1980s.
AJM: When did you first become interested
in the Olympic Dam story?
david upton: The actual trigger for it was
back in 2007 when BHP increased its resource
estimate which jumped by 70% in one go. I
thought, my goodness, this thing is enormous.
If you keep drilling it, it will just keep grow-
ing. It is such a seriously enormous resource
and from that point I wanted to understand it.
AJM: The Olympic Dam mine is a very
high-stakes operation. How did you gain
access to the companies, people and
archives you needed to write the story?
du: The person that paved the way for me
was Sir Arvi Parbo. I interviewed him initially
for a feature story and it grew out of that.
He introduced me to everyone that had an
involvement. Everyone was keen to talk to me
about it. BHP were very helpful and I think
without an introduction I would have been
fine there anyway.
42 JANUARY / FEBRUARY 2011
discoveries of prospectors from scratching at
minerals exposed at the surface.
But a revolution was underway, led by a
team of geologists at Harvard University in
Massachusetts, USA. Pioneering work in
structural and mine geology was taking place
The early going in Australia was slower than expected.
There were no quick wins, as many of Western Minings
influential shareholders had hoped.
under Professor of Economic Geology,
Donald H. McLaughlin.
The early going in Australia was slower
than expected. There were no quick wins,
as many of Western Minings influential
shareholders had hoped. But gold production
was finally beginning, generating much-
needed cash. Mines in the central fields of
Kalgoorlie and the Triton mine, near Cue,
had been brought into production. Other
new mines in Western Australia were also
about to produce.
AJM: Did you come across anything in your
research that surprised you?
du: I always perceived Western Mining to be
somewhat mystical. They were a big company
it seemed, and in the 1970s they were very
short of resources to do a lot of the explo-
ration that they did. But that was their culture.
how much they managed to
achieve on how little income
they had.
... it was just a surprise to me
They came from a place of doing a lot with
very little money and it was just a surprise to
me how much they managed to achieve on
how little income they had.
These would secure the future of Western
Mining, at least for the time being. The
best of science and a big commitment to
exploration had indeed carved out a place
for a new gold mining company in Australia.
But the other lesson learned in these
early years was the need for patience and
persistence. This knowledge would be
invaluable when the search that culminated
in the discovery of Olympic Dam began in
the 1950s. n
David Upton is a geologist and journalist. He had
full access to the legendary leaders of Western Mining,
including Sir Arvi Parbo, in researching his book.
David is contactable at davidupton3@bigpond.com,
on 0409 440 615, or see the website
www.theolympicdamstory.com.
AJM: What was most remarkable about
Western Mining?
du: It was only because they were so
committed to exploration that they found
these things. A lot of companies wouldnt
have stretched themselves so far. The piece of
information that summed it up for me was that
their first office in Adelaide was the garage
of the Adelaide geologist Dan Evans, who
rented his home at Flagstaff Hill, a suburb
in Adelaide. It was the office for Western
Mining in Adelaide for about two or three
years I think. They were incredibly frugal and
effective at finding things and it didnt matter
what it took they would get the job done
u
AUSTRALIAN JOURNAL OF MINING
 OLYMPIC DAM

t and would be very unusual today, because
of the way institutions invest. They care
AJM: Was there any one instance you can about the next three months and the next
recall that made you think, I have to write six months and dont seem to have any
this story? willingness to want to invest for two or
five years, let alone the decades Western
du: Western Mining was a very unconven- Mining were doing things over.
tional company that had a real commitment to It may be the sort of company we never see
spending money on exploration, with a very again. I wanted to understand that company
far sighted board that was prepared to invest and tell the story of how persistent they were.
It had established itself on manufacturing
and agriculture and desperately needed
something like Olympic Dam. The majority
of people really wanted a project like that,
that would bring jobs and prosperity.
The South Australian Government was
opposed to uranium mining in any form.
There was a ban on uranium mining and
that was the conundrum. There was this
deposit that has much to offer in terms of

copper and gold as well, but it was all

locked up with this uranium the Government

did not permit to be mined. It became

I cant think of a company today that would be enormous source of friction and debate.
It is hard now to recall what it was like
prepared to look for copper for 20 years and
for the partners at that time at Western
keep on having disappointments and keep going. Mining. Pretty much Sir Arvis wisdom
on this was, lets just do a feasibility
study lets find out what we have got,
and what we would be forgoing if we left
for decades. Olympic Dam was found after AJM: What was the social context that this deposit. BP then came in as a venture
20 years of looking for copper. They had Western Mining was operating in when it partner.
had a lot of significant disappointments in discovered Olympic Dam? BP actually committed $300m in modern
that time. terms at a time when uranium mining was
I cant think of a company today that du: In the early 1970s there was the first of banned. At the end of the day, this thing was
would be prepared to look for copper for the oil price shocks and by the mid-70s, that just too valuable and common sense had to
20 years and keep on having disappointments tipped the world into a global recession. prevail and thankfully it did. n
and keep going. They seem to be unique South Australia was particularly heavily hit.

Register on or before 25th February and SAVE $400

Reasons to Attend
s -EETTHEKEYPLAYERSIN!USTRALIASURANIUMINDUSTRY Register online
s !SSESSTHEDOMESTICMARKETANDIDENTIFYTHENEXTLIKELYPRODUCERS
and enter code
s 'AININSIGHTINTOMININGREGULATIONREFORM AJM
s
s
!NALYSEREGIONALDEMANDANDTHEGLOBALFUTUREOFNUCLEARPOWER
-ANAGEENVIRONMENTALAPPROVALSANDIMPROVESTAKEHOLDERENGAGEMENT to SAVE 1
0%
s )DENTIFYBARRIERSTOGROWTHANDASSESSPOTENTIALSOLUTIONS

REGISTER NOW: Tel (02) 8908 8555 or Web www.acevents.com.au/uranium 2011

AUSTRALIAN JOURNAL OF MINING JANUARY / FEBRUARY 2011 43