Next Investors logo grey

Mining’s tiniest problem?

Published 05-AUG-2016 13:39 P.M.


3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

Mining may just have a tiny problem on its hands.

Earlier this week the Western Australian Environmental Protection Authority knocked back a uranium project in the goldfields region.

There is nothing particularly strange about that, except that the EPA knocked back the application because of creatures which are less than 1mm in length and are found deep underground.

They’re referred to as ‘stygofauna’, and the EPA was concerned that the uranium project would wipe out the stygofauna in the area – a species about which little is known.

“The stygofauna habitat at Yeelirrie is particularly rich, with 73 species recorded – more than anywhere else in the northern Goldfields,” EPA chairman Dr Tom Hatton said.

“Despite the proponent’s well considered management strategies, based on current scientific understanding, the EPA concluded that there was too great a chance of a loss of species that are restricted to the impact area.”

What exactly are stygofauna?

They’re tiny invertebrates, usually blind, and are found in underground aquifers.

While they’re pretty abundant in almost all regions of Australia, they’re especially prevalent in arid conditions where the heat forces them to seek out cold, dark conditions deep underground.

Not great news for Australia’s miners, who usually seek to mine in those same arid conditions.

The ironic thing is that the environmental studies included in getting mining projects up and running are often responsible for finding said stygofauna; there’s no real scientific push to catalogue them, and as such we don’t know a heck of a lot about them.

Next Investors Image


What we do know is that they appear to play a role in nutrient cycling – which helps affect the quality of the environment in which they live.

In this case, the environment happens to be groundwater.

The thing is that it’s very hard to study them out in the field, and it’s also difficult to keep them alive in the lab – so that also contributes to us not knowing a lot about them.

It could be that the effect of stygofauna on the ecosystem could be overstated, but we just don’t know. Further research is needed, and you can’t really study them if mining projects wipe them out.

Most environmental authorities are almost now obligated to take stygofauna into account when assessing whether or not a mining project gets up.

The Yeelirrie decision also isn’t the first time stygofauna have been use to try and derail mining projects.

Back in 2013 stygofauna were used as a way for environmentalists to lobby the NSW government to put a halt to Santos’ CSG project in the Narrabri region of NSW.

The question is whether or not stygofauna could represent a massive problem to the broader mining industry.

After all, any project which draws down on water (which is a fair few of them), could be susceptible to invading the environment of these stygofauna.

In the case of the WA EPA though, there’s a school of thought that the project was unlikely to go ahead anyhow as the price of uranium is not currently high enough to support it.

In that context, is the EPA simply taking a safe approach knowing that the project is unlikely to get up? If the commercial weight is there, does the EPA take a similar line?

The project proponents can still appeal and the state’s environment minister still actually has the power to override the EPA’s recommendations, but the question is whether the EPA’s approach to stygofauna would be as rigorous for a project which has a better chance of financially benefitting the state.

Only time will tell.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.