Past exploration is the key to future discoveries – Theo van Leeuwen’s new book.

Past exploration is the key to future discoveries – Theo van Leeuwen’s new book.  (Vol 102)

Introduction.

Each reader will draw something different from Theo’s excellent new book on recent mineral discoveries in Indonesia. Most readers will be geologists keen to learn about the history of Indonesia’s mineral development, and perhaps use this book as a starting point for further exploration and discovery. This article looks at some aspects that the non-geologist may appreciate when considering an investment in the mineral industry, for exploration managers to learn persistence and approach, and for legislators to appreciate when formulating new mineral exploration policy.

When reading this book, I was reminded of a geological law which states “the present is the key to the past”, but Theo’s book also shows us that “past exploration is the key to future discoveries”.

The Author

Theo van Leeuwen (Theo) has recently written a book for Masyarakat Geologi Ekonomy Indonesia 10^th Anniversary Special Publication titled  “25 more years of mineral exploration and discovery in Indonesia (1993-2017)” that is to be shortly published by MGEI [ sekretariatmgei@gmail.com ] and soft copy to be available online from ResearchGate .Theo is a well-respected pioneer of the modern era of mineral exploration in Indonesia, having been in charge of Rio Tinto Indonesia’s mineral exploration operation from 1975 until his retirement in 2002. During his professional career a number of discoveries were made, of which some turned into mines and he has authored and co-authored more than 30 papers on geology, mineral deposits and the history of mineral exploration in Indonesia. In 1994 Theo documented the first 25 years (1967 – 1992) of significant post war mineral exploration in Indonesia, and this book may be considered as a follow up.

The Book.

Over the years, Theo and others have collected a diverse range of data source from private and public sources. This 318page book (English) brings together a wealth of knowledge, with 118 figures and 8 tables. The book starts out with a brief overview, followed by the regional geological & mineralogical settings of Indonesia, along with case histories of exploration programs that led to discovery, feasibility, production, and gives their geological setting. Most projects described are restricted to medium or large deposits, but also includes some occurrences that may warrant further exploration.  Much of the book details the various mineral discoveries, and may be considered as an essential geologist’s guide to further discovery of Indonesia’s rich mineral wealth. The last section “includes an analysis of discovery trends over the past 50 years in terms of commodity/deposit types, exploration methods, contributions to discovery by major/mid-tier and junior companies, state institutions and individuals, and the time it took from initial target identification to discovery and from there to the feasibility stage or production.”

The Time Factors.

Theo makes some important observations in his book about time and its relation to discovery.  “In many instances exploration of a particular prospect took place during more than one phase/ period, either more or less continuously, or with more distinct breaks.” Several examples are given, including; –

• “The Dairi district was discovered by Herald Resources geologists in 1998 in an area in North Sumatra where around the turn of the 19th century Dutch colonial soldiers had found lead-zinc-silver vein mineralisation, which was briefly mined (van Bemmelen, 1949).”
• “Several large-scale nickel laterite exploration campaigns were mounted in eastern Indonesia in the late 1960s and early 1970s, targeting peridotite terranes and laterite occurrences identified by the Dutch. A number of laterite resources were outlined. Only two were developed, viz. Soroako in eastern Sulawesi by INCO (taken over by Vale in 2006), and Gebe Island by Antam (van Leeuwen, 1994). Soroako, already known in the Dutch time,”
• “The history of the KSK project, named after the Indonesian holding company (PT Kalimantan Surya Kencana), spans more than 35 years of continuous exploration at a total cost of close to 60 million historical USD (M. Geiger, written comm., 2018). It is a tale of ups and downs coupled with persistence that still may have a happy ending.”

My own experience is similar to Theo’s, in that the time to undertake exploration is typically linked to investor willingness to spend money on exploration. A few major companies can take a longer-term view where some continue exploration in “off cycle” time in order to take advantage of cheaper contract prices (drillers etc). Most Juniors and some larger companies will only fund exploration when the investors are willing or able to spend. A well-managed and highly regarded prospect may be able to attract exploration funds to advance from target to feasibility at any time when nontechnical matters are favourable.

Theo also highlights the reality of many phases of exploration over an area, or deposit, that are often undertaken by different groups, perhaps with different views or approaches to the same target. The below quotes are very indicative of this concept:

“An overview of the successive booms in exploration is attributed to optimistic risk-taking investors, new exploration techniques and theories, discovery success, a suitable tenement system, and supportive government. The busts are attributed to scandals in mining, unstable socio-political conditions, drop in commodity prices and tougher government outlook towards explorers”.

“Mineral resource tonnages can vary over time with assumptions, commodity price and anticipated demand, calculation method and with ongoing exploration”.

Literature Research.

Literature research is a key component of an exploration program, wherein this book may help countless new exploration programs of the future. The book’s extensive section on the distribution of minerals (metallogenic provinces) is a guide to what minerals may be found in different parts of Indonesia, includes a number of discovery sites, and discusses the various geological settings.

My own experience during boom times, saw many geologists and entrepreneurs visited the various geological libraries in Bandung, and at provincial offices, seeking historical records of past mineral sightings or old mines. As Theo notes, “International stock exchanges listed companies tend to provide more complete and reliable data”, than local stock exchange companies, or even final reports that find their way into the Mines Department records. The publication of the 1:250,000 scale geological maps, with notations on mineral & coal outcrops, plus accompanying geological notes, provided a significant stimulus for prospectors to focus their selection of ground for taking up tenements. This selection process is often augmented by satellite born systems that provide images that may be interpreted to reflect various aspects of the underlying geology that may be significant for mineral discovery. The publication of topography maps (Bakosurtanal / Google Earth) allow for further desk top research to use stream patterns and hill characteristics to reflect on the underlying geology, along with access routes and design for regional sampling programs etc. Other public maps, particularly forestry act to rule out unobtainable prospective exploration areas.

The Role of the Geologist.

It is noteworthy how Theo places emphasis on the role of the geologist.

“The famous Australian geologist Haddon King (1989) defined a mineral discoverer as somebody who makes observations, recognises these for what they are or could be and, most importantly, does something about it. Doing something about it often means convincing higher ups that an indication, idea, hunch etc is worth following up. In larger organisations this usually involves several levels of management and many players. In this context it is worth emphasising the need for senior management to create an environment in which the field geologist feels empowered and trusted.”

“…a quote from Wood and Mac Corquadale (2015): “discovery of the Gosowong ore bodies can be attributed initially to fortuitous and informed ground selection, but was heavily determined thereafter by the actions of individual geologists”. “Discoveries are usually the result of team effort, but in some cases the actions of an individual may be a decisive factor. The Poboya and Way Linggo discoveries are good examples, as are the Grasberg and Batu Hijau discoveries.”

Theo’s comes to a number of conclusions that emphasize the need for the right exploration team led by an experienced and creative expert, and that more than just a structured exploration team is often required: “Conventional wisdom is often wrong and mental blocks are an impediment to discovery. To guard against this, management should allow/encourage challenging orthodoxy, risk taking, and exchanging of ideas and information. It also should add new blood to the team from time to time.” “Serendipity can play an important role in discovery. While a strong exploration focus is important, explorationists should also be prepared for the unexpected and take advantage of it as and when it arises (“Chance favours the prepared mind”, L. Pasteur).”

Whilst not covered in Theo’s book, one recent creative novel approach was conducted by Goldcorp in Canada using Unearthed, a crowdsourcing group, where they decided to put all their exploration data on an open public platform, and invited the public to compete for a cash prize to suggest where to find more gold. They received thousands of suggestions, from geologists, data processors and such. The end result was fantastic, wherein the company was able to shorten its exploration program and found huge new gold deposits. The rational is outlined in the following extract. “Value not used is value that does not exist. People with different expertise, experience and knowledge develop models and interpretations in different ways. They provide novel approaches and insights into data that are more varied and broader than what we may develop through our own limited experience.”

At various places throughout Theo’s book, many tools available to the geologist are mentioned, including airborne and ground magnetics, stream geochemical surveys, soil surveys, costeans, drilling, assay techniques etc. It Is my opinion that today this list is growing, particularly with drones, laboratory, computing as well as more geophysical and areal mapping tools. The booming exploration periods saw the development of local drill companies, assay laboratories and various consultancy services. Unfortunately, some quality geological tools are underutilized, or lacking in Indonesia, such as mineral petrology, age dating techniques etc. The research thesis of advanced university graduates is often not open to the public, and so cannot readily contribute to innovative exploration. Many successful geologists hold the opinion that it takes great observations by geologists looking at rocks in the field to recognize the subtle indications of ore forming processes, that may best lead to discovery.

State Sponsored Exploration.

During the recent April Tambang Conference titled “Kebijakan Batu Bara Nasional 2019” the Director General of Minerals and Coal (Bambang Gatot Ariyono) mentioned during the discussion that the downturn in private exploration could be taken over by the Government. In past era’s other governments around the world have undertaken mineral and coal exploration programs (Russia, China etc), that were often directed at identifying national strategic resources. Some international institutions have previously helped Indonesian regional exploration programs (French, Japan, British) through government to government programs.  Under the present government regulation’s, mineral exploration can be undertaken with private joint venture parties, wherein identified targets would then be auctioned, with the exploration joint venture party having bid matching rights. This concept has been floated on a number of occasions by various Mines Department officials, but never implemented as it appears government budgets are not forthcoming, and private enterprise are not attracted to this scheme.

The Past Experience.

Theo’s book has an excellent section analysing the success of past exploration periods, overall costs for discovery, which groups were more successful in discovery etc. Success can come from majors, juniors and state exploration efforts. Many future exploration programs may need to look in unconventional areas, under cover, need assistance from new technology and new ideas to find new deposits. The role of the creative exploration geologist will likely play a bigger role with these new challenges.

It is my opinion that developers of new deposits are likely to require to reduce project risk through the acquisition of ever more detail data to be input into the feasibility studies. Thus, even seemingly straight forward exploration programs on nickel laterite will need greater spatial definition (better surveys, ground penetrating radar etc), more detailed element analysis, along with a better-defined mineral process characterization (hardness / sticky nature etc) for ore mill fill considerations. The standards of data collection and reporting are being lifted through the JORC / KCMI / SNI reporting code requirements. Theo’s criteria of various terms of classifying exploration projects may be considered by the KCMI committee, the Mines Department (ESDM) and Indonesian Stock Exchange (IDX). These terms include “mineral occurrence / prospect/ deposit/ ore deposit/ anomaly”, along with deposit class terms of “significant/ moderate/ major/ giant” and with the terms of “discovery / discovery date”.

Proponents of state sponsored exploration are strongly advised to read Theo’s book to better appreciate what has made the Indonesian exploration so successful in the past, and which elements may be brought forward to improve Indonesia’s future exploration success.

The Future Challenges.

Theo’s outlook on future challenges to further greenfield exploration in Indonesia reflect that of many others within the exploration industry: –

• “One of the biggest challenges Indonesia’s mining industry is facing today is that its pipeline of prospects and deposits for future mine development is rapidly drying up as for the last two decades there has been hardly any greenfield/initial brownfield exploration. Indonesia is not alone in this respect.”
• …the recently introduced tender system severely restricts exploration companies’ ability to select areas with the best perceived potential.

Theo’s book then goes on to set out a number of suggestions on ways to encourage greenfield exploration, and some key factors that are critical for discovery.

Theo’s book finishes up with a series of points “learned from Indonesia’s modern history of exploration and discovery that may assist in unlocking its remaining mineral potential.” It is a must-read for all mineral exploration people, and for historians alike. A number of Indonesians are similarly producing books on selected aspects of Indonesia’s mineral exploration. The challenge now is for more books to be written on this exciting and important period of Indonesia’s exploration success, and failures before that knowledge and detail is lost forever.