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October 2012

The pit viper 310 series launching at MINExpo 2012


Iron Ore Holdings inside •• Focus: South Australian minerals

• Goldfields Mining Expo preview


24 Managing Editor: Michael Cairnduff Editor: Thomas Smith Contributing Editor: Tim Treadgold Journalists: Alison Middleton, Vetti Kakulas Production Manager: Mata Henry Senior Layout Designer: Diane Igglesden Layout Designer: Catherine Hogan Chief Sub-Editor: Gerald Bradley Sub-Editors: Melanie Jenkins, Dani Malone Contributors: Robin Bromby, Michael Pascoe, John McIlwraith, Stephen Bell, Mitchell Hooke National Sales Manager: Angela Smith Advertising Sales: Richa Fuller, John Andersen, Nigel D’Silva, Vanessa Monastra Advertising Production: Isaac Burrows ( Subscriptions: Ph: (08) 6263 9100 Email: 12 issues per annum – Australia $A156.00 (GST included); Regional (PNG, NZ, SE Asia) $A252.00; International $A300.00 Executive: Colm O’Brien – Chief Executive Officer Trish Seeney – General Manager John Detwiler – Chief Financial Officer Head Office: Australia’s Mining Monthly, 613-619 Wellington Street, Perth, Western Australia 6000; PO Box 78, Leederville WA 6902 Ph: (08) 6263 9100 Fax: (08) 6263 9148 Email:,, Website:, COPYRIGHT WARNING All editorial copy and some advertisements in this publication are subject to copyright and cannot be reproduced in any form without the written authorisation of the managing editor. Offenders will be prosecuted.

Australia’s Mining Monthly average audited monthly circulation: 8,269

MINING OLYMPICS Australia’s Mining Monthly hands out the medals after the latest set of financial results.

Features 32 Focus: Iron Ore Holdings 38 Focus: Honeywell 42 Coal Asia Pacific 50 Crushing & Conveying 62 Hancock Mining: Roy Hill project update 84 Long Haul With China 144 Fuels & Lubricants

Regulars Editor’s Notebook Moves Hardware Michael Pascoe MCA

04 06 12 20 26

Robin Bromby ASX Update Mining Software Market Watch Dryblower

30 151 152 154 160

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Darkest before the dawn It’s been a month of project cancellations, jobs losses and endless speculation on the future of the Australian mining industry.


t’s been an interesting month. Projects cancelled, redundancies at Fortescue Metals Group and, of course, the daily see-saw of speculation,

prediction and crystal ball gazing on the future of Australian mining. BHP Billiton’s decision not to go ahead with the Olympic Dam expansion surprised

Simon, looking slightly dwarfed, in front of the Liebherr 996.

Thats a big shovel BACK in May, Australia’s Mining Monthly invited readers to submit mining-related photos they deemed worthy of lighting up the Editor’s Notebook. We didn’t promise publication, but we did guarantee full consideration. Simon Buurman is business development manager, mining and export,

at Victoria-based automotive electrical firm Baxters. He’s rather proud of this photo of him in front of a Liebherr 996 excavator, taken at Century Mine in northern Queensland. All words and no colourful photos makes the Editor’s Notebook very dull indeed. Thanks, Simon.

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few of us. But the fact that the world’s biggest mining company was scaling back a major project was, perhaps, more significant. This presented solid evidence of the ongoing contraction that the Australian mining industry is currently experiencing. News that FMG was cutting jobs simply added greater industry concern over the current situation. So where are we? Hmm ... With everything we’ve seen in recent weeks, we’ve quite clearly entered the contraction phase. Projects scaled back, sights lowered, etc etc. Personally, I’m pitching my tent with the optimists. No one can deny that there will be pain. Just ask the former employees of FMG who received the dreaded tap on the shoulder. But what if the optimists are right? What if we’re entering a phase of long-term stability, where production and iron ore prices follow a steady, robust path? The industry, and the people running it, have to adopt a measured, mature approach that secures this outcome. There are many examples that this is already happening within the industry, despite the obvious pain which is also evident. But the government also has to support Australia’s mining industry. Instead of trying to squeeze every last cent from the resources sector, strategists and politicians must set short-term gain aside and do what’s right. Do what’s right to protect and support an industry that could and should secure the future of generations of Australians. Do what’s right to apply a fair tax system that’s proportionately balanced and respects the rights of the Australian people to benefit from the country’s incredible natural resources, and rewards the companies brave enough to invest billions of dollars into mining projects. This current period of contraction offers an opportunity to stabilise and reset. For everyone – both politicians and miners. In the meantime, spare a thought for those who lost their jobs at FMG and elsewhere. Enjoy October’s edition of Australia’s Mining Monthly.


IRONCLAD Mining has announced the resignation of Wayne Richards as managing director. Its chief operating officer Robert Mencel has accepted the role as acting chief executive officer. Wayne Richards Mencel was previously general manager of Mount Gibson Iron’s Koolan Island project, in Western Australia’s Kimberley region. SOUTH Australian copper producer Hillgrove Resources has announced its managing director Drew Simonsen has resigned. Company secretary and chief financial officer Russell Middleton will be acting chief executive Russell Middleton officer, while a selection process is undertaken. Shanthi Smith has replaced Middleton, as acting chief financial officer and company secretary.

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ENGINEERING, project management and technical services company Aurecon has appointed Joe Petracca as development leader for Western Australia. Petracca has worked extensively in the mining and resources industry, mainly in the

iron ore sector. He has previously worked in technical and project management roles at BHP Billiton Iron Ore and Rio Tinto Iron Ore. EXPLORATION company IMX Resources has announced the following changes to its executive team. Geologist and investor relations specialist

moves Chen steps in WESTERN Australian gold producer Norton Gold Fields has appointed mining engineer Dianmin Chen as managing director and chief executive officer, replacing Andre Labuschagne. The management changes coincide with China’s Zijin Group gaining an 89.15% interest in Norton. Chen previously worked with Barrick Gold and was the chief operating officer at CITIC Pacific Mining. Additionally, Norton has announced its financial controller Dané van Heerden as acting chief financial officer, until a permanent CFO is appointed. David Constable has been appointed nonexecutive director. Constable has more than 40 years experience working in senior executive roles at Canadian mining companies. Exploration geophysicist and lawyer Michael Hannington has been welcomed as general manager, exploration and business development, Africa. Prior to this role he was managing director of exploration companies TNT Mines and Alchemy Resources. PROJECT delivery company Engenium has welcomed back Greg O’Rourke as director. O’Rourke is one of the founding directors at Engenium. Prior to this position he was a non-executive Greg O’Rourke director at Pacer Engineers. O’Rourke was previously the managing director of a joint venture operation established between Engenium and Calibre. Under his management, CEJV grew from a start-up company into one of Australia’s largest engineering and project management companies.

Dianmin Chen

GOLD and base metals exploration company Hannans Reward has announced Olof Forslund and Markus Bachmann as nonexecutive directors. Geophysicist Forslund is the founding director of Scandinavian Resources. Bachmann is a director at Scandinavian Resources and founding director of asset management firm Craton Capital. ZAMBIA-focused manganese company Kaboko Mining has welcomed Simon Youds as technical consultant. Youds is a mining engineer with mine project development and mine management experience in Africa, Papua New Guinea and Australia. Prior to joining Kaboko he was chief executive officer at African Iron, now known as Exxaro Resources. MONGOLIAN coal explorer Draig Resources has announced a series of changes to its management team. Andrew Harrison, who was previously a non-executive director, has been announced director. Colwin Lloyd has been appointed non-executive director. Lloyd is principal geologist and director of Geobase Australia, a consultancy firm for the resources industry.

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Focus: Financial results

Gold, silver and bronze Australia’s Mining Monthly hands out medals to the top miners in the inaugural Mining Olympics. Tim Treadgold analyses the latest set of financial results.


t would be a very cruel world if someone managed to win a gold medal at the Olympics and lost his job at the same time, but that’s what almost happened to the chief executive of BHP Billiton, Marius Kloppers. The employment threat to Kloppers surfaced during the London Olympics after the company reported a big asset-value write-down from an ill-timed investment in the US shale-gas industry, followed by the mothballing of two major expansion projects, events that annoyed investment banks. Interestingly, however, those negatives did not prevent Kloppers from outperforming rivals from the world’s other major mining


companies to claim a gold medal in the Mining Monthly Olympics for the best overall performance or, to be more accurate, the least worst financial performance.

Winning gold gave BHP Billiton management scope to crow. While not easy to make direct comparisons, it is worth looking at the four top miners that reported half-year or full-year results during August as the Olympics were in full swing and to judge the medals they might have won.

In the Mining Monthly Olympics, the medal order looks like this: Gold – BHP Billiton, for lifting revenue in the year to June 30 by a modest 0.7%, a stunning achievement aided by its oil division at a time of falling commodity prices, and suffering a profit fall (as measured by earnings before interest, tax, depreciation and amortisation, or EBITDA) of just 9% to $US33.7 million compared to $37 million in 2011. Silver – Rio Tinto, for restricting its revenue decline in the half-year to June 30 to 12.7% ($25.3 billion), but incurring an EBITDA fall of 29% to $10 billion.


Bronze – Xstrata, for doing well at the revenue line with a 7% slide in the half-year to $15.55 billion, but suffering an EBITDA profit fall of 31% to $4 billion. No medal awarded – Anglo American, but only after a photo-finish to separate it from Xstrata, after a greater-than-Xstrata revenue decline of 10% to $16.4 billion and an Xstrata-matching EBITDA fall of 31% to $4.9 billion. Also in the running, but under false pretences because of its big wheat, cotton, sugar and soy trading operations, was Glencore, the would-be merger partner with Xstrata.

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If Glencore’s results had been purely mineral-related it would have taken silver thanks to a stunning 17% increase in revenue to $108 billion and an equally impressive EBITDA result which revealed a 17% fall to $3.2 billion. The enormous gap between revenue and profit at Glencore underlines the difference between it and the pure miners, with Glencore’s sales numbers benefiting from high-volume, low-margin products such as shipping wheat and soy, neither of which it grows, merely providing transport and warehouse services. Sticking with the top four miners, an interesting picture emerges, albeit a cloudy

one given the different reporting times and different mix of products. But after allowing for the differences it is clear that BHP Billiton’s gold medal was earned thanks to its preference for what it calls “tier one” assets which produced a winning approach in tough times, largely due to the best projects working to lower costs and having greater production flexibility. Rio Tinto’s silver medal also recognised a higher calibre of assets, but one pulled down by the company’s big, but barely profitable, aluminium division (sales valued at $5 billion for a meagre profit of $556 million). All of the runners in the Mining


Focus: Financial results banks, including UBS, Credit Suisse and Deutsche, pointing to an almost steady result for 2013. The banks expect BHP Billiton earnings per share to come in at 287.4c (against 289.6c in 2012), before recovering to 332.4c in 2014. Share price tips from the eight banks all point up, with the consensus price for BHP Billiton in 12 months time being $A39.17 (as opposed to recent trades at $33.10) with the outlying tips coming from Bank of America Merrill Lynch at $34.50, and Deutsche Bank tipping $43.30.

Rio Tinto’s silver medal also recognised a higher calibre of assets.

Going down? The Xstrata jet and dolly seem to be going in the same direction, according to the cover of the half-yearly report.

Olympics did so in similar conditions, with BHP aided by being able to incorporate its first-half performance, when commodity prices were stronger, with the profit translating into basic earnings per share (the metric preferred by investors) of 289.6c compared to 429.1c in 2011. The top four companies also commented on the tough conditions, but all took the unusual action of increasing dividend payouts to shareholders, perhaps to fend off investor criticism, or perhaps as an indication that their managers are confident of better times ahead. Winning gold gave BHP Billiton management scope to crow, which it did at the equivalent of a post-podium press briefing, claiming that its performance was aided by owning better assets than the other three pure miners. “Our strategy to own and operate large, long-life, low-cost, expandable, upstream assets diversified by commodity, geography and market remains a major point of differentiation, particularly in the current,


more challenging economic environment,” BHP Billiton said in a statement accompanying its profit announcement. Iron ore output in Western Australia earned special mention by BHP Billiton, as did what management described as “disciplined investment throughout the economic cycle”, an observation which sits oddly with the shale gas write-offs. Only two of the key measurements of BHP Billiton’s 2012 financial year performance were printed in black ink, the 0.7% rise in revenue from $71.7 billion to $72.2 billion, and the 10.9% increase in the dividend from $1.01 to $1.12. Looking ahead, BHP Billiton warned that Europe remained unstable, but China was introducing economic stimulus measures to boost growth. The company retained a positive longer-term view as urbanisation and industrialisation spread across the developing world. Management, naturally, did not forecast the likely profit outcome in the year. Investment banks did, with the consensus of eight leading

Rio Tinto, the silver medal winner, expressed the same confidence as BHP Billiton about the year ahead. “While we are mindful of short-term uncertainties, we remain convinced of the strength of the long-term demand outlook,” Rio Tinto management said in notes accompanying its profit result. Tom Albanese, Rio Tinto’s chief executive, said the company continued to generate strong margins despite falling prices, reflecting the low-cost nature of Rio Tinto’s businesses and a first-rate operational performance. “We are reaping the benefits of investing early in iron ore, which is producing consistently high returns,” he said. Xstrata’s bronze medal, putting it a fraction ahead of Anglo American, was more significant than it looks because it confirmed the potential for the company to “stand alone” and to not become part of the greater Glencore group should a merger between those two win shareholder approval. Mick Davis, Xstrata’s chief executive, said: “The inherent capacity of Xstrata to generate value as a stand-alone company remains very, very powerful.” Whether Davis can resist for long the overtures of his forceful friend, Glencore chief executive Ivan Glasenberg, will be watched carefully, with a deal between the two companies potentially creating a business (Glenstrata?) to challenge BHP Billiton for gold when the Rio de Janeiro Olympics roll around in 2016. • Odd spot: As a rare touch of humour for a mining company, Xstrata’s half-year report featured a cover with stylised drawings of men at work and an underground mining cart (dolly) with trees growing in it and a plane, sputtering across the page before appearing to dive headfirst into the dolly in what some people might see as a rather unfortunate way of illustrating the company’s future.



Simba’s Pride Inspired by Africa, designed in Sweden, and now arrived in Australia. The new quartet of Simba long hole drilling rigs is ready to get to work. By Alison Middleton 12

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FIVE KEY FACTS • The BUT 45 heavy-duty boom delivers greater accuracy, control and flexibility • Simba’s boom-mounted drilling unit has a longer reach than its predecessor • Simbas can be used for any long hole drilling application • Increased carrying capacity enables the use of the RHS 35 rod handling system • Simba’s versatility means one machine can do the work of several drilling rigs


amed after the Swahili word for mountain lion, Atlas Copco’s latest drill rigs are built for strength and agility. Readers may remember that an Atlas Copco drill rig graced the pages of Australia’s Mining Monthly in August. We’d need a good reason to review another drill rig from the same company in quick succession. Let us explain. The Simba ME7 C and the E7 C are both long hole drilling rigs with a top hammer rock drill for medium to large drift sizes. And the Simba S7 D has been adapted with a hydraulic top hammer rock drill for small to medium drifts. A production drilling rig with pneumatic in the hole hammer for deep straight holes, the Simba E7 C-ITH completes the new additions to the latest E-Series range. Designed for rock drilling in the toughest of mining conditions, the Simba E-Series comes equipped with a BUT 45 heavy-duty boom with high precision and carrying capacity. Atlas said the Simba’s greatest strengths were accuracy, control flexibility and carrying capacity with a boom extension of up to 1.6m and a 1.2m feed extension. The E7 C long hole drilling rig was recently unveiled to Atlas Copco’s mining customers at the official launch in Perth, Western Australia. Seven rigs have already been snapped up, Atlas business line manager for tunnelling and mining equipment Wayne Symes said the additions opened a whole new range of options for miners. “What we wanted to show with these particular machines is that you can have a boommounted machine that is versatile and has a larger hole range. Previous boommounted machines had been limited to the rock drill they could carry.” We can reassure our readers that it won’t be long before you see the Simba range on the pages of AMM again.

The Simba E7 C long hole drilling rig was unveiled to miners at an event in Perth.




Hiring for Roy Hundreds of unemployed manufacturing workers are hoping to gain a job at the Roy Hill Project with the launch of a national recruitment campaign. By Alison Middleton


he Roy Hill Project is hoping to recruit skilled workers for the company’s new iron ore mining project in the Pilbara from communities suffering from manufacturing job cuts. In recent months, the company has been deliberately targeting areas such as Kwinana in Western Australia and the Illawarra region of New South Wales where there are higher numbers of skilled people seeking work. It follows the appointment of national workforce services company Skilled to secure advance expressions of interest from jobseekers in a national recruitment campaign. Around 250 expressions of interest were received following a job forum held at Kwinana last month, while even more interest was expected from a similar event in Illawarra due to the large numbers of unemployed steel workers. Roy Hill Project chief executive officer Barry Fitzgerald said: “We expect the bulk of the job opportunities will emerge after final investment approval in early 2013 and the subsequent appointment of major contractors. “Our aim is to provide our contractors with the details of skilled and semi-skilled workers who have registered their interest in working on the project. “This intensive approach towards the recruitment of Australians further demonstrates our efforts to secure local applicants with the right skills and experience to tackle the construction work challenges of the Pilbara.” Fitzgerald said Skilled had a large existing database and the capability to identify suitable candidates through advertising, online, telephone, face-to-face discussions and jobs forums.

An artist’s impression of the Roy Hill Project.

“The contractors themselves will be directly responsible for undertaking primary recruitment and hiring for the construction phase of the Roy Hill Project,” Fitzgerald said. “Their efforts will be bolstered by Skilled’s major national recruitment program and complemented by Roy Hill Project online applications, as well as other avenues including the Resources Channel online service and the federal government’s jobs board.” He said the company’s attendance at both jobs forums followed representations from Brand MP Gary Gray, Gilmore MP Joanna Gash and NSW Senator Fierravanti-Wells. “Roy Hill Project will also maintain a

strong commitment to training and upskilling through its contractors to support ongoing opportunities for Australians to participate in the future of the resources industry,” he added. “This is not only through internal programs but also through our enterprise migration agreement commitment to provide training positions in proportion to the potential use of overseas workers if suitable Australian workers cannot be sourced.” He said the national recruitment drive built on the $1.4 billion investment that the Roy Hill Project had made in WA and the local supplier road shows recently conducted in Port Hedland, Newman and Perth.

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BHP tenement exit Contracts to purchase licences surrounding Olympic Dam have been terminated. By Lauren Barrett


HP Billiton has terminated contracts with Tasman Resources which would have seen the miner add six additional tenements to its portfolio in the prospective Gawler Craton region in South Australia. Perth-based exploration company Tasman said it had received notice from BHP of the termination of two conditional contracts to acquire five exploration licences and one exploration licence application. The licences cover a total of and are situated in the Stuart Shelf/Gawler Craton area, which hosts the Olympic Dam and Prominent Hill deposits. BHP’s decision to not pursue the purchase comes after the company announced it would not go ahead with a proposed $A28 billion

open pit expansion of Olympic Dam. BHP said the tenements were not crucial to its portfolio. “After further reviewing our completed tenement acquisitions in the Stuart Shelf, combined with the recent grant of some additional exploration licence applications, the company is satisfied with its existing exploration options in the region and chose not to proceed with the purchase of Tasman’s tenements,” BHP said. In April, BHP went on a spending spree in the region, signing a deal with junior Minotaur Exploration to acquire its Gawler Craton tenements for $10 million and announcing it would purchase Archer Exploration’s West Roxby tenements for $8 million. Tasman would have pocketed $2.95 million

upon the transfer of the licences and a further $75,000 upon transfer of the exploration licence application. Tasman Resources executive chairman Greg Solomon said BHP’s announcement did not impact “in any way” on the company’s Vulcan joint venture project with Rio Tinto. “They were entirely unrelated. We’ve started our drilling program, the one we have in joint venture with Rio Tinto, and they’ve paid us the initial $10 million,” he said. “We’ve got a significant program going over the next seven or eight months. “We have ample funding available out of the first payment received from Rio Tinto.” • A version of this story first appeared on

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African opportunities A finance and insurance director believes the African mining industry presents many opportunities for Australian companies. By Vetti Kakulas


lthough Africa’s mining industry may present some competition for Australia, it is also creating plenty of opportunities for local firms, says Export Finance and Insurance Corporation director Leela Hanson. The Export Finance and Insurance Corporation is the Australian government’s export credit agency and is based in Sydney, New South Wales. Hanson believes Africa’s growing resources sector is not only benefitting Australian mining companies, but also mining services and infrastructure firms. Australian Foreign Minister Bob Carr has stated that one in 20 Australian public companies already have an investment in Africa. And the Department of Foreign Affairs and


Trade has forecast that Australian investment in Africa will grow to $50 billion in 2012-13. “As expansion into Africa continues, the Export Finance and Insurance Corporation may be able to help eligible Australian companies that are exporting goods and services to African countries,” Hanson said. “We help Australian-based businesses to win and finance export, offshore investment and onshore export-related opportunities. “Working with their banks, we can consider providing these firms with working capital guarantees, bonds and term loans, or loan guarantees, to enable them to take advantage of these opportunities. “We help firms in situations where their bank is unable to provide funding for a contract.

Export Finance and Insurance Corporation director Leela Hanson.

“(We can also) support mining and mining services companies exporting or expanding to Africa,” Hanson said.

OCTOBER 2012 amm



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It’s just like rugby What do BHP Billiton and the Wallabies have in common? Quite a lot, actually. Except, rugby is played in heaven.


obbie Deans and Marius Kloppers – the Wallabies coach and the BHP Billiton chief executive officer – might not appear the most obvious double act but they do have some things in common. Both are under pressure to provide results. Both have talked plenty of talk. Scorecards are kept in both sport and business. You can hide for a while in both pursuits but eventually the record tends to catch up with you. The big difference is that in business, the CEO class tends to be paid a motza, whether successful or not.

There has been a series of takeover attempts that haven’t come off, capped by a couple that unfortunately did. The Wallabies have lost the Bledisloe Cup for the 10th year in a row. (For those not followers of the game they play in heaven, the Bledisloe is the prize for trans-Tasman rugby supremacy.) A decade is a long time between beery drinks out of the big tin trophy. Worse than not winning though was the way the Wallabies lost this year – a mindless performance by a set of backs given to hapless kicking. As Kiwi and Manly rugby league coach Graham Lowe once said, there are two types of coaches: those who have been sacked and those who are waiting to be sacked. Deans is waiting. Then there’s Kloppers. To keep various football code lines running, an Aussie Rules or soccer fan might say he hasn’t exactly been kicking many goals. There has been a series of takeover attempts that haven’t come off, capped by a couple that unfortunately did: buying US shale gas at the peak of that bubble. Kloppers took the helm of a club that had been scoring very nicely indeed thanks to a couple of predecessors cleaning up an earlier mess and refocusing the company on having


dirty great big mines in the bottom quartile of the cost curve and therefore not having to worry too much about the ebb and flow of commodity prices. That lesson appeared to have been forgotten in the US oil shale mess – which cost Kloppers and his petroleum chief their short-term bonuses. It means they’re only getting millions this year instead of more millions. Which is all preamble to BHP’s outbreak of caution: you shouldn’t expect much risktaking from someone who’s just copped a hiding for taking risks. BHP’s open cut plans for Olympic Dam were a big risk in anyone’s language. Whether the company has been right or wrong in shelving such a big spend will only be known in half a dozen years when commodity prices will be at a level that will either justify the spend or make it a disaster. And Kloppers and chairman Jac Nasser are likely to be long gone by then.

The curious thing is that after making the Olympic Dam decision, Kloppers suddenly seemed to rediscover the old BHP mantra about having bottom quartile costs. Suddenly, prices are all about mean reversion again and it’s a much more sober world.

It means they’re only getting millions this year instead of more millions. If the very well paid types at the top of BHP had been consistently thinking that, they wouldn’t have made their oil shale mistakes. Yes, hindsight is a wonderful thing and emotional scarring from the impact of failure is to be expected.

OCTOBER 2012 amm

Michael Pascoe

China bears – Bah! One thing’s for sure: there’s no point asking federal Resources and Energy Minister Martin Ferguson or Marius Kloppers if the commodities boom is over. And I don’t know if Robbie Deans has an opinion one way or the other. All manner of pet shop parrots were happy to jump on the Olympic Dam decision as evidence of the commodities boom’s demise. In one of his more memorably forgettable performances, Opposition Leader Tony Abbott made a complete goose of himself by trying to blame it on the carbon and resource rental taxes. And it probably wasn’t a good idea to imply the end of life in South Australia either. For mine, the Reserve Bank of Australia’s version of events makes considerably more sense from people capable of more nuance and less ideological warfare. So no, the commodities investment boom isn’t over. We have another couple of years of surging capital expenditure, though we will see more marginal projects fall out of the resources pipeline. (We’ve never had the people, machinery or capital for all wish-list projects anyway.) And the really good news is that after the peak construction phase passes, the production phase kicks in to finally earn some money. The boom’s fruits roll in for many, many years to come. But to accept that, you first have to bash your way through the battalions of China bears – the people devoted to predicting the imminent collapse of China. Again, I suspect RBA governor Glenn Stevens makes more sense. As he summarised for the parliamentary economics committee: “The Chinese economy looks like it has slowed to a pace of growth that is likely to be more sustainable. This is, though, clearly below

the pace seen for much of the recent past and the implications of this new pace of growth for the trajectory of demand for various commodities are still being worked through in the relevant markets. “Commodity prices have declined. Australia’s terms of trade peaked about a year ago. However, they remain high in comparison with most of the past century. Overall, the developments in key commodity prices do not seem out of line with what we can observe about the progress of the global economy.” The observation is that our key trading partners continue to do considerably better than the rest of the world. It’s so nice to be part of Asia, as a few billion people there show no sign of wanting to roll over and play dead. They’re too busy fighting to get ahead.

Turbulence Finally, in ruling off a turbulent August that had more commodity uncertainty and fear mongering than we’ve seen in years, it was nice to see a mining chief executive officer happily putting his money where his mouth is, realising that there is opportunity in any state of flux. OZ Minerals CEO Terry Burgess seems to be one person who was particularly delighted that BHP was shelving the Olympic Dam expansion. To celebrate, he rushed out to buy another $70,000 worth of OZ Minerals shares. BHP not going ahead means less inflationary OZ Minerals CEO Terry Burgess. pressure on the OZ Minerals workforce and less copper being produced down the track does OZ revenue hopes no harm at all. Now, if they can just get Escondida to go on strike and Freeport-McMoRan to be overtaken by ethical concerns over its Grasberg mine.

amm OCTOBER 2012

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Australian exodus? Recruitment boss warns of Australian mining personnel exodus to Africa and beyond. By Alison Middleton


drive for adventure and excitement is prompting thousands of mine workers to leave Australia and choose a career in resources

overseas. That’s the view of Globe 24-7 chief executive officer Lachlan Spicer, who has warned that Australians are moving to mining jobs abroad in search of new opportunities and a less bureaucratic mining industry. Canada, Chile, Mongolia and Ghana are among the countries experiencing a particular demand for experienced workers, as an increasing numbers of projects come online. Spicer told delegates at an Australian Mines and Metal Association migration and labour sourcing conference in Perth that, with the global mining space booming in recent years, other countries were trying to attract workers from the Australian talent pool. “That’s one of the pressures on Australia – we do have a lot of people who are working overseas in an expatriate environment,” he said. “There’s a lot of interest from those countries to bring guys over from Australia to work. Australians are very expensive, but they are perceived very well by the global mining industry. “A lot of Australians will move for a variety of reasons. Some will do it from a career point of view, some want the adventure, others are sick of the red-tape of Australia. “Others are young professionals who


have done a few years in Australia, got their experience and then they’ll go do a six week on, three week off roster out of Africa. But they’ll spend three weeks skiing or three weeks in the Bahamas.”

“There are a lot of people doing fly in, fly out on really great rosters out of Southeast Asia.” – Lachlan Spicer Spicer said that mining was a truly global industry and skilled workers were a commodity that could be transferred anywhere in the world. Globe 24-7, which has offices in Perth, Western Australia, and Brisbane, Queensland, manages recruitment and expatriate relocation for international resources projects. “The big challenge around Australians from a global perspective is that they are expensive,” Spicer said. “Their salary expectations are much higher than anywhere in the world. “But that’s not to say Southeast Asia isn’t a great opportunity for Australians. “There are a lot of people doing fly in, fly out on really great rosters out of Southeast Asia, such as the Philippines, Indonesia and Vietnam.” With an opportunity to travel and work in a senior role abroad, many young Australians

Globe 24-7 chief executive officer Lachlan Spicer.

are being lured overseas before returning to Australia with an impressive CV to settle down. “Some of the young guys will have five years over here, head over to Africa as a senior mining engineer or a senior mine planning engineer and his role will be quite senior,” Spicer said. “The adventure, the opportunity and the career development, the chance to make a difference in a smaller company in Africa has a lot of appeal.”

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Made in Australia Will mining companies sign up to the iconic trademark that lets the world identify Australian exports? By Alison Middleton


ining companies exporting to China are being asked if they would like machinery and ores to be covered by a formal trademark that instantly identifies products as genuinely Australian. Seven classes of goods including pharmaceuticals, furniture, food and beverages are covered under the Australian Made, Australian Grown logo, which has now been formally trademarked in China. The logo provides a legal framework to support a company’s country-of-origin claim in cases of illegal copying or infringements of intellectual property rights. However, classes six and seven, which are particularly relevant to the mining sector, have yet to be covered under the registrations. Australian Made chief executive Ian Harrison said he would encourage the mining industry to sign up and asked companies to consider the benefits of having the iconic logo. “We chose the classes that we thought would provide immediate support for export activity to China,” he said. “In terms of the ores or products of the mining industry, we have not sought cover for

that. We’re very happy to do so, but we would only do so in conjunction with the industry. “There’s not significant coverage at the moment in the machinery and related industries that support Australia’s mining exports. “It’s a very costly process, but if we believe there are significant exports going out of Australia to China in other categories we would be very prepared to use the base we have now established to extend the coverage to other classes of goods including common metals or alloys, ores, mining equipment and machinery. “The mining sector, and the equipment and processes being developed to support the resources industry, are so very important to Australia. “We’d find it fantastic if they came to us as an industry group and said they wanted us to apply for classes six and seven in China. And we would immediately apply for it.” Harrison said that historically China had been a challenging environment for the protection of intellectual property. “The AMAG logo’s formal registration in China as a country-of-origin symbol for Australia now provides an essential legal

The Australian Made, Australian Grown logo, which establishes products as genuinely Australian.

framework which exporters can rely upon in the event that the logo, or product carrying it, is copied or used without proper authority,” he added. Australian Made commenced the registration process four years ago with the financial support of the Australian government. “Australia has long enjoyed an invaluable reputation as a reliable exporter of highquality goods,” Federal Trade Minister Dr Craig Emerson said. “The government welcomes China’s legal recognition of the Australian Made, Australian Grown symbol and the benefits our exporters will enjoy from additional confidence in the Australian brand.”

The AMAG logo’s formal registration in China as a country-of-origin symbol for Australia now provides an essential legal framework which exporters can rely upon.” – Ian Harrison The work was carried out by Australian Made campaign partner EKM Patent and Legal. Formal registration of the AMAG logo in China follows its registration in the US.


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Fast and loose? Uh ... no The Australian minerals resources industry has been accused of operating a “loose” regulatory regime. It’s time to set the record straight.


wenty years ago, mining was rightly or wrongly regarded as the neighbour from hell. We weren’t engaged with the community or appropriately aligned with many of the key principles of sustainable development. But what a difference two decades have made. In the past 20 years, there has been a fundamental change in the minerals resources industry’s approach to the way it operates and a top-to-bottom embrace of the triple bottom line. Our environmental and social performance is every bit as important as our economic achievements. It makes claims by author Paul Cleary in his latest book more than a little hard to fathom. Cleary asserts that the minerals resources industry hides its environmental performance and operates in a “loose” regulatory regime. This is news to us. As well as a fundamental change in the way we operate, the regulatory environment in Australia has been dramatically strengthened across all jurisdictions in recent years.

We do not hide our environmental performance. The minerals resources sector is now the most heavily regulated industry in Australia, with mining approvals typically requiring consent from all three levels of government. Added to that, there are extensive periods of public consultation, comprehensive environmental and social impact assessments, lodgement of environmental bonds or securities with governments and ongoing reporting and assessment to ensure that the operation remains entirely consistent with the heavily conditioned approval. And layered on top of that again, almost all the states and territories further restrict this process for approvals with additional policies designed to shield certain regions. Mining approvals in Australia now typically take between five and seven years to complete and comprise a complex array of licences and approvals from a range of different government agencies. This


includes mines departments, environmental protection agencies, heritage and native title/ land rights authorities, wildlife conservation administrators, water licensing bodies and even departments of consumer and employee protection. Further, if a project has the potential to impact on a matter of national environmental significance or indigenous heritage, it is has to be assessed and approved by the Commonwealth. All of this is undertaken separately to state and federal treasuries’ considerations of their current and future receipt of taxes and royalties from the minerals sector. If governments were only interested in revenue, no project would ever be rejected or so heavily environmentally conditioned. Similarly, approvals are never taken in isolation of the other activities impacting on the environment or communities. A case in point is the recent Namoi Catchment Water Study initiated by the independent Member for New England, Tony Windsor. The study found that even with the highest growth scenario for resource development within the catchment, the collective impacts of coal mining and coal seam gas extraction could be effectively managed without negatively affecting agricultural water use across the region. Indeed, the potential impacts on water drawdown by mining and CSG would be low compared to existing water drawdown from current land uses in the region, largely agricultural. Once a mine has received approval, which usually includes hundreds of environmental and social caveats, any variation from the approved mining proposal requires a separate approval and public consultation period. Companies are then required to lodge annual environmental reports outlining any environmental management activity undertaken in the past 12 months and any proposed to be undertaken in the upcoming year. These are all publicly available. We do not hide our environmental performance. Nor has the minerals resources industry ever sought to diminish regulatory standards. A condition of membership of the Minerals Council of Australia includes a commitment to Enduring Value – the Australian Minerals

Regulated: Australia’s mining industry operates under a set of strict guidelines.

Industry Framework for Sustainable Development. Recognised by the United Nations as a leading industry framework, Enduring Value provides a suite of community developed performance objectives that exceed regulation, complemented by public disclosure requirements on our environmental and social impacts. The Minerals Council’s critique of the approvals system has centred on approvals taking too long, being too costly, too bureaucratic and “process driven” rather than being focused on good outcomes and not always representative of the objectives of government or the community. Similarly, neither the government nor the opposition propose to reduce regulatory oversight but rather to streamline assessments and approvals, freeing the resources in the approvals system to focus even more strongly on critical risks and to ensure their effective management. No one is proposing to deny government the authority to both review and enforce project conditions. The evidence of the extent of industry regulation and the robust nature of government enforcement and compliance approaches is irrefutable. Unfortunately, there are still many who operate in a factual vacuum relying on the word of academics and activists whose raison d’etre is to raise funds to campaign against mining developments.

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Black and blue days Most people get the blues at the prospect of going back to work after enjoying some time off. But a psychologist has studied exactly how the “black day” affects mining shift workers. By Alison Middleton


miner’s “black day” is a term which is increasingly being used among Australia’s mining shift workers to describe the emotionally toughest day before returning onsite. For many workers, the black day falls on either the day before going back to the minesite or the day of travelling itself, with miners reporting feeling sad or stressed. Fly-in, fly-out and drive-in, drive-out workers worrying about their workload or concerned about their family’s safety while they are onsite can trigger emotions associated with having a black day. Adelaide-based psychologist and mining community website Mining Family Matters resident expert Angie Willcocks said a black day could mean different things for different people. “There’s a FIFO phrase that seems to be popping up a lot lately and it’s called ‘black day’,” she said. “Not surprisingly, it’s used to describe a FIFO or DIDO worker’s toughest day. “‘Black day’ is usually used by the person flying or driving out for work, as opposed to those left behind. “For some people, the hardest day is the final day of their time off. While for others, it’s the actual day of travel back to the minesite.” Common symptoms include feeling irritable, depressed, anxious, stressed and unable to focus. “There are different feelings, different emotions, depending on what people are thinking and what they are facing,” Willcocks added.

Recognising the issue is important for both the industry and workers. Being flexible, where possible, could make a difference. “If mining companies can give people a little bit of flexibility in terms of people travelling back to work, then that’s useful,” she said.

“‘Black day’ is usually used by the person flying or driving out for work, as opposed to those left behind.” – Psychologist Angie Willcocks “Miners should consider anything that’s going to make it easier. “There are practical things that people can do to stop them worrying. “By identifying the problem, people can work on simple strategies to alleviate it. “Plus, knowing you’re not alone in feeling this way can be a huge help.” Refusing to dwell on feelings of sadness, keeping busy and talking with family or friends can all help to cope with sadness or stress. However, for mine workers who have taken practical steps but still find it difficult to function in daily life, then it may be time to consider whether there is a more serious health issue. Willcocks added: “A good rule of thumb is to ask whether it is interfering with the

Mining Family Matters resident psychologist Angie Willcocks.

tasks that are expected of you by society. “If you can’t get out of bed, you can’t go to your kid’s football match, or you miss your flight, then it is time to realise that it isn’t a so-called ‘normal’ black day. “If it is affecting your normal functioning, then that is one thing, another would be if it is continuing for more than one or two days. “Then it is important to seek help.” Anyone worried about their health should contact their employee assistance program, call national depression initiative Beyond Blue on 1300 22 4636 or speak to their local GP.

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A decade of difference

2002 seems like ancient history when you examine Australian mining interests then and now.


f the words of that 1950s song What a Difference a Day Makes have any meaning, then consider what a difference a decade makes, especially in the mining sector. Looking back to October and November in 2002, you get a sharp sensation of how much has changed and how transitory mining can be. Not in terms of mine life or the duration involved in progressing from rock chip samples to the feasibility studies but how many companies and projects have fallen by the wayside or gone on to other things. So what interested and preoccupied me in those two months, 10 years ago?

What’s left of the diamond sector now? Near to nothing. Today, for example, Synergy Metals is busy in the East Gippsland region of Victoria with areas of old gold workings at Glen Willis and Sunnyside. Not back in 2002, though: then, the company was picking up gold projects around Kalgoorlie. Namakwa Diamond Co was bulk sampling in South Africa and very pleased with the 11,000 diamonds recovered by that stage. Now it’s a very different beast as Resource and Investments, Miles Kennedy’s Doolgunna play. Newmont Mining was just wiping up the minorities at Normandy NFM, including

Save the date: A lot has happened in the mining industry over the last decade.

the holdings of North Flinders Mines (as it had been previously) founder Geoff Stewart. Stewart founded the company in 1969 with $30,000 of his own money and by the time Robert Champion de Crespigny gained control in 1997, the operation was worth about $1 billion. Hill End Gold was promising cash flow within six months as it launched its float. It did not quite work out that way. But one gold project that had everyone talking back then was the 1999 discovery of the Thunderbox deposit. It was to remain one of the few big finds in Western Australia for

some time. But, unlike some other projects, it did not drag on for years. In November 2002, Thunderbox saw its first gold pour. They were heady days and well before the mine started throwing up a few problems. With some chronological symmetry, it closed in November 2007. Of course, Thunderbox’s initial owners – LionOre and Dalrymple Resources – are not the only companies to have disappeared subsequently from the ASX boards or been transformed into a new vehicle. While they were busy and excited with the first gold pour at Thunderbox, Gravity Capital


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Robin Bromby was committing to spend $2.5 million on four diamond projects in the Northern Territory and County Diamonds sold $US148,950 worth of output at the Kimberley Diamond Exchange – two stories that remind us how big diamonds were with Australian investors in the 1990s and spilling over into the new century. At this time, too, BHP Billiton and an Antwerp diamond house were taking stakes in Dwyka Diamonds and its plan to explore in India. The company is now Nyota Minerals and hunting gold in Africa. What’s left of the diamond sector now? Near to nothing. But while the names have changed and the companies are no longer what they were, the scale of the problems have not. Ten years ago MIM was throwing in a cash sweetener of $53 million to unload its two lossmaking zinc and lead plants in Europe. Meanwhile, in the first weeks of October 2002 stricken zinc producer Pasminco was looking to raise fresh capital for a 2003 re-listing. Plus ça change, as some Frenchman once said.


Africa is key The number of people attending the recent Africa Down Under conference in Perth attests to the vital interests that are now held in that continent by Australian companies. There was a timely warning from convenor Bill Repard that this country faces real challenges ahead in Africa because we simply don’t have enough grunt when it comes to capital formation. This has been obvious for a long time – why else have so many of our companies moved to, or dual-listed on, the Toronto exchange? And it’s going to get worse with the expected lull in metal prices. But at least Repard’s comments gained some coverage locally (not that anyone will do anything about it). I wonder how many attendees read a recent opinion piece by Royal African Society executive director Richard Dowden and published in The Times.

“The people of those countries were never told how much the minerals beneath their feet were worth and they never saw any benefit from them.” – Royal African Society executive director Richard Dowden Following the killings of mine workers at the Marikana platinum mine, the death of 60 miners in the Congo when a goldmine shaft collapsed and the forced labour revealed to be happening in that same country’s mines, Dowden made the very strong point that “time and again mineral resources seem to bring conflict and misery rather than prosperity”. He noted that places that had been mined out and abandoned were often some of the poorest places he had ever visited – places like eastern Sierra Leone, parts of Namibia and South Africa. “The people of those countries were never told how much the minerals beneath their feet were worth and they never saw any benefit from them,” he wrote. The Chinese companies operating in Africa recently achieved bad publicity through the methods they used to run mines. But the Chinese were just behaving like many Western companies operating in Africa, he said. It is another side of the Africa resources boom that might bear pondering.

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Focus: Iron Ore Holdings

Stoking the furnace Iron Ore Holdings, controlled by media mogul Kerry Stokes, plots a lean and efficient future in Western Australia. By Stephen Bell

Bungaroo South in Western Australia’s Pilbara.


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FIVE KEY FACTS • Iron ore prices down more than a third from September 2011 peak • Kerry Stokes-controlled Iron Ore Holdings has more than $100 million in cash • Pilbara hopeful aims to “monetise” three iron ore projects, despite price falls • IOH also studying $400 million minetruck-barge venture in west Pilbara • MD Alwyn Vorster eyes Maitland magnetite sale process in early 2013


lot has gone sour in the past year for WA’s iron ore hopefuls. Prices of the steel-making commodity have slumped by more than a third, skittish investors have deserted the sector in droves and credit facilities have all but dried up. Even global giant BHP Billiton has scaled back spending, postponing a decision on its $20 billion outer harbour project in the Pilbara until the second half of next year at the earliest. For smaller players, the sector is no longer a guaranteed meal ticket, particularly if you have a project needing capital, a port or a railway line. Nevertheless, some junior hopefuls are


struggling manfully against the tide. Iron Ore Holdings – controlled by media mogul Kerry Stokes – has ridden out the downturn in decent shape, largely because of its “discover, de-risk and monetise” business model. During the boom, IOH lagged behind peers with bold visions and big budgets. Nowadays, its conservatism is more of a blessing as investors gravitate away from aggressive growth plans. Nevertheless, the model may be on the verge of a significant tweak to reflect the more bearish conditions. IOH is weighing up becoming owner-operator of an intriguing mining and export venture in the west Pilbara. The project still has a few hurdles to overcome but may be a “game changer” for IOH, managing director Alwyn Vorster says. A shrewd South African whose 25-year career includes stints at Rio Tinto, Kumba Resources and Oakajee Port and Rail, Vorster assumed the IOH role in late 2010 to drive the sale of IOH’s scattered Pilbara deposits. In his first year, Vorster secured sales and/ or option deals with Rio, Mineral Resources and FMG. It has left IOH with more than $100 million cash in the bank, two potential royalty streams and 1.69 billion tonnes of iron ore resources in three locations.


Focus: Iron Ore Holdings Vorster’s next challenge is how to extract the best value from IOH’s remaining core projects: Iron Valley in the central Pilbara, Bungaroo South in its western hub and Maitland River – a coastal magnetite play. Some are already lined up for sale. In particular, FMG paid $25 million earlier this year for an option over Iron Valley, exercisable in March for $20 million plus royalties on any revenues. When the deal was struck in February, the second payment seemed a sure bet. That’s because Iron Valley, with 260 million tonnes of resources, sits alongside FMG’s Nyidinghu deposit – earmarked for the group’s next growth spurt beyond its current Solomon expansion. Since then, however, FMG chief executive officer Nev Power has slowed down Solomon’s timetable to save costs, casting doubt over when Nyidinghu will be developed. Thus, it remains to be seen whether FMG will exercise the option.

Vorster’s next challenge is how to extract the best value from IOH’s remaining core projects.

Explore and expand: Iron Ore Holdings.


In any case, Vorster believes he has more options up his sleeve, with or without FMG: “We are confident that other parties with access at Port Hedland remain interested in having further discussions,” he said. And it is not only Iron Valley that needs a plan B in these uncertain times. The other is Bungaroo South. Until a few months ago the deposit, which boasts 242Mt of resources grading 57% iron, was marketed as a substantial 15 million tonne per annum project feeding into the API joint venture’s proposed Anketell port via a new railway line. Bungaroo sits alongside API’s Buckland Hills deposit, so could be developed as one giant project. Strategically, however, IOH decided it could not afford to have the longmooted Anketell port as its sole option. “We decided we can’t be at the complete mercy of the API timeline and cost structure,” Vorster said. That view was validated in August when API half-owner Aquila Resources said the JV was moving to “conserve funds” in light of the unfavourable global economic conditions. Aquila said it was a “prudent” action while API awaited key project approvals. Its west Pilbara project has slipped well behind schedule as WA Premier Colin Barnett decides whether to appoint a third party infrastructure group as the port proponent, instead of API. The political “impasse” over the port has

OCTOBER 2012 amm

held up Aquila’s funding talks with China Development Bank, raising doubts as to how quickly the port will proceed. Anketell’s go-slow may push IOH down the unfamiliar path of becoming an owneroperator. The company has quietly been exploring the possibility of a smaller scale development of Bungaroo South, which would involve trucking the ore 160km to the Pilbara coast. This would transform IOH into an Atlas Iron lookalike, exporting iron ore on the back of a trucking operation. A prefeasibility study on the mine-truckbarge concept, known as project Buckland, is due for completion before year’s end. Despite the prospect of “double handling” costs – trucking and barging – the initial economic signs looked promising. But it remains to be seen whether the project will stand a bout of sustained, lower iron ore prices. And Vorster cautioned there was another key hurdle that needed to be crossed. “The whole concept stands or falls on whether we can secure tenure at a coastal site,” he said. IOH recently purchased the Mardie tenement, which contains an area that may be suitable for a small-scale barging facility. That section of WA’s Pilbara coast is thick with mangroves but IOH has identified a small

area within its tenement that may be suitable. It has room for stockpiles and could support a “finger jetty” extending 1-2km into the Indian Ocean that would carry a conveyor belt to load self-propelled barges. The small vessels would then sail out to sea to service ships at anchorage: either Panamax-sized, which could probably come within 6-12km of the coast or potentially larger Cape size vessels beyond 12km.

This would transform IOH into an Atlas Iron lookalike, exporting iron ore on the back of a trucking operation. The case IOH is presenting to the WA government is for a 5Mtpa to 8Mtpa facility, with limited spare capacity available to third parties. In this guise, IOH hopes Mardie will be accepted as a one-off trans-shipment area that wouldn’t compete with the state government’s grand plans for a 115Mtpa deepwater port at Anketell, 150km up the coast. “It does appear to us we can construct

a mine, dedicated haul roads and a small barging facility for around $400 million,” Vorster said. “If that is the case, then the IOH board will have to decide whether we want to venture down that path ourselves, or consider bringing in a joint venture partner that would proportionally help us fund construction of the project.” It could prove an interesting decision for Kerry Stokes, who owns 53% of IOH via investment company Wroxby. His son, Ryan Stokes, sits on the IOH board. It might not be long until the board has to weigh up the pros and cons of the smallerscale development. “The tenure on the road and the port will make the project stand or fall,” Vorster said. “By the end of this year we will know whether the self-development option on project Buckland is viable.” If so, he said, Buckland could be “very attractive to a number of parties – current smaller mining companies who have a limited growth profile in iron ore”. Vorster didn’t identify which parties. However, the obvious candidates would include Mid West miner Mount Gibson Iron, whose Tallering Peak operation is due to finish by the middle of next year and Pilbara operator BC Iron, which is looking to

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expand beyond its Nullagine JV with FMG. Meanwhile, IOH is concluding a “concept study” on its other asset, the Maitland River magnetite project, 20km inland from the Pilbara coast, near Cape Preston. The plan is to conduct a partial sell-down of the 1.1Bt project once the study concludes in the latter part of this year. It will provide a snapshot of the mine footprint, facilities layout and power/ infrastructure options, alongside an estimate of costs to take the venture to the next stage. “That will be the document we need to start talking to potential partners,” Vorster said, adding that discussions would begin in the first quarter of 2013. Funnily enough, one of those parties may include direct shipping ore champion FMG. It acquired 50% farm-in rights over Maitland in February as part of its option to acquire Iron Valley. Of course magnetite is not everyone’s cup of tea at the moment. High capital costs, long lead times and processing risk are obvious factors deterring investors and financiers, who have watched cost overruns and delays at several other WA magnetite projects – including Citic Pacific’s $8 billion Sino Iron venture. Even Vorster acknowledges that magnetite is not fashionable.


“But what I hope we can prove through the Maitland River study is its location – proximity to power, water, infrastructure and the coast – could offset some of the high costs you would traditionally find in these types of hard, fine-grained types of magnetites in the north Pilbara,” he said.

“We will be braver looking forward by venturing outside iron ore.” – Iron Ore Holdings managing director Alwyn Vorster

Maitland will only work if some of those “location” benefits offset some of the high processing costs, Vorster concedes. The deposit is 20km from the coast, 10km from Cape Preston (Sino Iron’s port site) and 70km from Anketell. “In the three years I spent at Oakajee doing due diligence on magnetite projects, I went from a sceptic to a convert in terms of the long-term future of magnetites,” Vorster said. At present it is hard to get the blood racing when discussing the “pros” of this lower-

grade form of iron ore. But Vorster believes Japanese and Chinese firms are thinking a decade ahead when the quality of DSO iron ore may deteriorate further. It should provide a window for the better quality magnetite ores to fill the quality gap caused by a prevalence of DSO contaminated by too much phosphorus, alumina, silica, etcetera. “I don’t think the Mitsubishis of the world who are becoming involved in the Mid West see this as a necessity in 2015,” he said. “They see that in 2020-2030 magnetite will be in much higher demand than it is now.” In the case of Maitland, Vorster believes there are parties holding similar “long-term views”, who will be willing to farm-in, pay for the studies and earn a right to develop the project. Along with monetising IOH’s remaining projects, the company is plotting a move outside the commodity that made its name by seeking other “steel-making and energy raw materials”. With cash in the bank, IOH is well-placed to drive further deals. “We will be braver looking forward by venturing outside iron ore,” Vorster said, adding that manganese, iron sands and coking coal assets would be on the radar in the next 12 months.

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Focus: Honeywell

Sustain. Ability Lou Caruana attended the Honeywell Users Group Asia-Pacific symposium at Surfers Paradise in Australia’s Gold Coast.


he mining industry is on the cusp of an automation revolution. The pressure on mining companies to extract greater volumes of minerals at geographically dispersed and remote locations is driving management to leverage as much out of its human resources and equipment as possible. New enabling technology has made virtual solutions and remote sensing a reality. Bulk miners in the iron ore and coal sectors are now ready to embrace the technological development that other sectors, such as oil and gas, smelting, and advanced manufacturing, have already embraced. US company Honeywell claims it is at the forefront of the integrated management approach of technology, which seeks to harness automation to operate machinery and equipment, as well as communicate with personnel at a number of different sites around the globe at any time of the day. The developments are not science fiction or the latest technological

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buzzwords, according to speakers at a recent Honeywell Users Group symposium in the Gold Coast. Instead, they have been proven to provide real bottom line benefits in the order of 13% to mining and oil and gas operations under demanding conditions. “Mines are becoming larger, so the complexity is not so much in the process but in the supply chain,” Honeywell Process Solutions Pacific sales director Garry Mahoney said. “So a one or two per cent improvement can deliver significant returns to shareholders. “Our expertise is around complex processes, oil refining and LNG, so we tend to operate and differentiate in complex environments. The technology could be complex or the engineered solutions could be complex. “A lot of our R&D spend is going out to the customer and assessing their needs and problems and solving them, as opposed to technology for technology’s stake.” According to Mahoney, the backbone of Honeywell’s Experion Orion PKS technology has been developed in its Sydney office in New South Wales, in close consultation with its mining company customers who asked for a solution that would deliver results across a whole supply chain, rather than in individual operations. The next generation system has undergone major advancements that can help improve plant production by up to 13%, significantly reduce operator-related safety incidents and lower the total cost of ownership by up to 30%, according to the company. The Experion Orion PKS is the first industrial process system to use universal channel technology to remotely configure process and safety systems without the need for additional hardware. Chile’s Codelco went down the path of integrated management with Honeywell to ensure that three of its copper mines in the harsh Atacama desert could operate at maximum efficiency, without the need to strand the company’s experts in remote and inaccessible locations for protracted periods of time.

“Mines are becoming larger, so the complexity is not so much in the process but in the supply chain.” – Honeywell Process Solutions Pacific sales director Garry Mahoney

Mahoney said the mining industry wanted to improve performance and it was driven by the need to ensure shareholder returns. “All major companies are now looking at how they optimise their business and collaboration is the next big thing,” he said. “Collaboration could be putting infrastructure in place, or making decisions from maintenance to the production people. Collaboration can be a step change in management.” Mining culture has traditionally been driven at the operational level but the complexity of the supply chain and the discreet systems within each of the stages from production to the port has brought tech savvy mine managers to the fore.

OCTOBER 2012 amm

Honeywell Process Solutions Pacific sales director Garry Mahoney.

“Different industries are at different parts of the journey and that goes back to their different drivers,” Mahoney said. “So the bulk commodity drivers are that they know that they have to build infrastructure fast to get their return. “Collaboration provides job satisfaction, knowledge retention and benefit sharing and retains knowledge from project to project. “Like all things where you see value – where you can operate more safely and more efficiently – people will come on board. “It is part of the change management, in building collaboration in environments to engage with people to help them solve their problems. People will take that journey. If it’s pushed on people, you will get push-back. I think the industry is mature enough to understand the requirement for change management.” One of the challenges the mining industry faces is sustaining operational improvements in the face of variable environmental, geotechnical and human resources management variables. “It’s important for organisations to communicate with all their stakeholders the vision and where you are trying to take the organisation,” Mahoney said. Part of that is change management and communication with the entire value chain including unions, contractors and third party suppliers.

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Focus: Honeywell “Changing ways to do business needs technology that can make the changes in real time. The technology is not a barrier,” he said. Mahoney believes Honeywell can use the technology to help mining companies, using intelligence it has gained to add value to their commodity exports. It could also help alleviate the critical skills shortage being encountered by the industry, which many of Honeywell’s mining company clients have identified as a key operational constraint. “Looking at what the mining companies’ business requirements are has an impact certainly on product development,” Mahoney added. “Training, skills, knowledge management and skills management have become more important, as has the retention of knowledge and building of skills.” Honeywell says its solutions can ensure that onsite knowledge is managed – stored by the company so localised expertise is not lost with the inevitable churn of experienced staff around the company, as well as to rival miners if personnel accept employment outside the company. The benefits “smart devices” bring to engineering, commissioning, operations and troubleshooting are no secret: faster commissioning, useful digital information

Honeywell Process Solutions chief technology officer Jason Urso.

and simpler maintenance procedures all add up to significant project implementation savings, according to Honeywell. However, the savings cannot be achieved or sustained without an intelligent instrument management system and the practices and procedures that nourish smart digital instrumentation through routine maintenance which Honeywell says can be supplied by its field device manager. Honeywell is confident that its Experion R410’s native support of ISA100.11a field devices can safely and securely extend the

process control network into the field with a OneWireless infrastructure. A plant-wide wireless infrastructure that supports extensible applications, such as the new Experion Mobile Access application, can now put Experion data into mobile workers’ hands. “It’s about bringing that intellectual knowledge about how to run the plant into a standard format, so it can be used by Honeywell’s Intuition [executive software],” Mahoney added.

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Coal Asia Pacific

Aspermont supporting regional coal sector Aspermont will launch a new coal publication in October, Coal Asia Pacific, which is previewed in the following pages. By Thomas Smith


Pacific would complement Aspermont’s other established publications in the coal and energy space. “Aspermont has one of the most experienced teams in the business-to-business publishing space when it comes to providing coverage of the coal and energy sectors, led by senior editor – energy Noel Dyson,” Cairnduff said. “Coal Asia Pacific will delve deeper into the regional coal industry, which despite M A G A prices, Z I N still E attracts languishing commodity significant investment from the private sector and indirectly the public sector.” Note: Aspermont is the publisher of Australia’s Mining Monthly.


uilding on a highly successful South Pacific and Central Asian jurisdictions, 2011-12 financial year, Aspermont as well as keeping a watching brief on relevant is following an aggressive growth developments across the Indian Ocean on the path with both its print and online subcontinent. publishing suite – with one of those projects As the masthead suggests, the magazine will being the launch of its third coal magazine, focus on the burgeoning coal industry within Coal Asia Pacific. the region, including coverage of industry The company recorded substantial growth and market news, project features, reviews, in all divisions in the past year and continues product profiles services and technology. to demonstrate the ongoing strength of its A regular feature will be the Regional Roundbusiness model, as well as its support of the up pages, dealing with individual countries Inside the Asia Pacific coal industry industries within which it publishes. in the region where there’s been strong news The first edition of Coal Asia Pacific, over the publishing cycle. The first edition will previewed in the following pages, will mark include Indonesia, Australia and India. the start of what will become a quarterly Aspermont managing editor Michael publication circulating widely in Australasia, Cairnduff said the launch of Coal Asia


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COALSuppliersGuide 42

OCTOBER 2012 amm

China has options for coal and iron ore supply: Rudd Australians should remember there are other potentially significant suppliers of coal and iron ore to the Chinese market. By Michael Cairnduff

Griffith MP Kevin Rudd.


ddressing a resource conference in Perth last month in his capacity as the Member for Griffith, former Australian prime minister and foreign minister Kevin Rudd painted a rosy future for China’s economic growth, despite recent softening. Rudd’s presentation drew heavily on the release of the joint publication by the Australian Strategic Policy Institute and South Africa’s Brenthurst Foundation entitled Fuelling the Dragon, which he described as a timely and substantive contribution to the critical local debate on China. “Today I would like to talk to you about a constant thing that affects [global] economies … and not just mining industries but more broadly our economies in their breadth and depth – and that is the question of China’s future economic growth,” Rudd said. He said the core question confronting treasuries and finance ministries around the world at present was what were the near, medium and long-term prospects of the Chinese economy. “The problem we all face, including those of us who have studied China closely, is that making robust predictions about the Chinese economy is difficult at the best of times.

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“When we add to that the complexity arising from this year being a year of significant political change in the Chinese leadership – by convention now a once every decade event. “On top of that, there is further complexity arising from the recognition of the Chinese themselves in their most recent five-year plan released in 2010 that the Chinese growth model for the future must change.” Rudd said most would be familiar with China’s economic record so far, where in the decades since China undertook fundamental economic reforms it had transformed itself from being a backward economy, closed-off from the rest of the world, into an increasingly open economy that was fully integrated into the global economy and was now the world’s second largest economy after the US. “By any historical measure, this has been an extraordinary achievement,” he continued. “China is not only the world’s second largest economy but on track to become the world’s largest – either in this decade or the next. “China is also now the third largest economy in terms of its international trade. Between 2005 and 2010, China accounted for more than 80 per cent of the increase in global demand for nearly all metal and energy products.”

Commentary in the Fuelling the Dragon publication from federal government advisor Professor Ross Garnaut, according to Rudd, claimed that in the “absence of prodigious growth in Chinese demand for most energy and metallic mineral commodities, reasonable growth in the developing world – beyond China – would have merely offset the weaknesses in growth in developed countries and prices would have languished below trend”. In other words, Rudd said China had constituted the single differentiating factor of any significance in the recent economic downturn. “So, what is the significance for Australia? The paper also draws our attention to the fact that Australia’s terms of trade have not been as high for more than a century – 65 per cent above the twentieth century average level and 80 per cent above the twentieth century trend level.” Australia’s GDP, according to analysis within the publication, was about 13% higher in nominal terms than it would have been in the absence of these relative price changes. “Resources currently make up around 57 per cent of our exports, the largest proportion of which comes from the state of Western Australia. This has risen from 41 per cent


Coal Asia Pacific of our total exports nationally back in 2005,” Rudd said. “This in turn has been driven by metallurgical coal and iron ore, with a 500 per cent increase in iron ore export volumes since 2005 as well as significant recent growth in coal exports. “Of course, this is not the entire picture of the Australia-China resources trade but it is a significant part of it and that part of it is driven by the demands of China’s steel industry.” According to the publication, China’s steel production over the past decade was used in the following ways: the construction industry (50-60%); machinery manufacturing (1218%); automobile manufacturing (5-6%); and domestic appliances (2%). China’s own efforts to meet the needs of its prodigious domestic demand have been hampered by the low quality of its iron ore resources and by the geographical separation of the resources from the country’s principal production centres. Geographical separation has also been a factor in the Chinese domestic coal industry. “In both of these cases for most of the past decade, China has reached the rational conclusion that it is in its overall economic interest to meet this demand through large scale imports, initially from Australia but also increasingly from Latin America and Africa. “Australians need to remind themselves that they are not the only potential significant source of supply for the Chinese market – although we are significantly advantaged by geographical proximity relative to both Africa and Latin America.” But the core question for both the Australian and global resources and energy sectors was the sustainability of China’s medium to longterm demand for steel in the context of its own future economic development profile. Further commentary within the publication suggested that China had entered the midphase of industrialisation, which was more minerals and energy intensive than the earlier, labour-intensive phase. The publication also outlined two conflicting analyses of where China’s resource consumption could go to in the future. One possibility – based on the trajectory seen in Japanese economic history of recent decades – concludes China will not reach peak steel consumption per capita until 2024. In quantitative terms, current Chinese steel output is more than 600 million tonnes and by 2024 it will surpass 1 billion tonnes. The publication then puts forward a contrasting view from Garnaut, who argues that while absolute energy consumption will continue to increase, climate change and other considerations will cause the greater growth in energy consumption to diminish consistent with Chinese policy directions – reducing emissions intensity for overall Chinese production.


Specifically, Garnaut claimed resource intensity of production would decline rather more rapidly than seemed to be the expectation. “In a further analytical contribution to this debate, the publication also draws on historical patterns of resource usage in other global economies based on their respective economic histories,” Rudd said. The analysis of the historic pattern of consumption levels relative to income reinforces the view that China is in its midphase of industrialisation. “The key question then is that if this is the mid-phase, then what does the final stage look like in terms of absolute demand for resources and energy and its relative growth over the next decade.”

“Making robust predictions about the Chinese economy is difficult at the best of times.” – Former Australian prime minister and foreign minister Kevin Rudd This was where the degree of complexity with the analyses became acute, according to Rudd. However, he said many factors remained encouraging, including the analyses of the massive projected increase in the size of China’s middle-class, rising to 1.1 billion people by 2030. “Leaving aside major problems like traffic management and environmental pollution, China’s automobile penetration ratio is only 5 per cent at present of that of the United States. “The publication concludes that China is projected have almost 20 times the motor vehicles in 2030 as it had in 2002, which is a comparable level of vehicle ownership to that of Japan in the 1970s.” China’s automotive manufacturing industry is the largest in the world and at present accounts for 7% of Chinese GDP. A further positive for demand is China’s urbanisation. In 2011, for the first time in China’s history, more people lived in cities than in the countryside. Although the high rate or urbanisation is likely to diminish, the infrastructure demands from China’s “mega-cities” and socalled second-tier cities – that is the 100-plus Chinese cities that now have populations in excess of 5 million people – will continue to generate significant demand for energy and resources. “The publication wisely cautions us that one of the strengths and weaknesses of China’s national planning system – combined with its tradition infrastructure-intensive stimulus spending in times of global and

national economic downturn – is that there has been significant anticipatory investment in the Chinese infrastructure sector, thereby potentially reducing future investment demand.” For the purposes of visualisation, Rudd pointed to a recent survey which outlined anecdotal examples of the urbanisationrelated drivers of China’s resource demand through until 2025. “Consider these: 350 million more people moving to the cities; 221 Chinese cities with a population greater than 1 million people, compared to the 35 such cities in Europe today; 1 million kilometres of new road; 28,000km of new metro rail; 170 new mass transit systems, twice the number in all of Europe; 1.6-1.9 billion square metres of new floor space; 50,000 new skyscrapers, the equivalent of two Chicagos each year; 97 new airports; and, in fuelling the above, 1000 megawatts of additional coal-fired generating capacity to be commissioned every week. As I said, that is enough to take everyone’s breath away.” Drawing his own conclusions from the publication, Rudd said although recent Chinese economic indicators suggested some softening in Chinese demand, the country’s actual economic growth performance in the year 2012 was still likely to be north of 12% – ahead of market expectations. “On balance, I am cautiously optimistic about where this will leave China’s demand curve for energy and resources out to 2025. What this means in the interim, however, is the Australian economy and Australian business must begin to embrace fully the dimensions of the diversification of the Chinese economy and our engagement with it to one that is not exclusively based on the resources and energy sectors.” It may also open future opportunities in agribusiness, new materials manufacturing, the financial services sector, the health services sector, education services, construction, engineering and design services, mining services, environmental services and tourism. Rudd said Australia and China should rapidly conclude their bilateral Free Trade Agreement to underpin the broadening of economic engagement for the future. “Given the critical importance of investment flows in underpinning an economic relationship with Australia, Australia should maintain its current open and non-discriminatory investment policies towards China. “And, consistent to Foreign Investment Review Board policies, consider each application on its merits, rather than yield to politically driven populism that we’ve seen from some in recent times, including Tony Abbott and from his political and intellectual soulmate Barnaby Joyce.”

OCTOBER 2012 amm

Glencore goes hostile The tone of negotiations has taken a turn for the worse as global heavyweights Xstrata and Glencore try to finalise merger plans.

Xstrata CEO Mick Davis.


he merger of equals between Glencore International and Xstrata became a hostile takeover in September, with Glencore proposing to replace Xstrata chief executive officer Mick Davis with Ivan Glasenberg as CEO of the enlarged entity. In an extraordinary turn of events, Glencore upped its offer just minutes before the shareholder votes were due to take place in Switzerland, where the two companies are based. It has been widely reported that Glasenberg and Qatari Prime Minister Sheikh Hamad bin Jassim bin Al-Thani held negotiations in a London hotel room prior, which were mediated by former UK prime minister Tony Blair. Qatar’s sovereign wealth fund Qatar Holding had been vocal in its opposition to the merger and demanded a ratio of 3.25 shares for every one Xstrata share held. The proposal offers 3.05 Glencore shares for every one Xstrata share, up from 2.8 shares offered previously and will be structured as a takeover rather than a scheme of arrangement. Glencore is also proposing to replace Davis in the top job with its own chief Glasenberg, who would have been deputy chief executive under the previous arrangement. Xstrata chairman Sir John Bond informed shareholders at the meeting on September 7 that minutes earlier Glencore had put forward a proposal to amend the terms of the merger. Bond stressed that it was not a firm offer but still proposed a fresh resolution to delay the court meeting indefinitely, which was passed. Later on Friday night Xstrata released a subsequent announcement, saying it was in no position to make a recommendation, though its independent directors made some observations. The company said the increased ratio represented a 17.6% premium to Xstrata’s share price in February, when the original deal was announced and a 22.2% premium to the closing price on Thursday. Xstrata’s independent directors said the premium was “significantly lower than would be expected in a takeover”. Unsurprisingly, the directors also took issue with the plan to sideline Davis, who has been chief executive since before the company’s listing in 2002. “The intention to replace Mick Davis as CEO and to amend the management incentive arrangements represents significant risk around the retention of the Xstrata senior and operational management

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intended to be responsible for approximately 80 per cent of the combined group’s earnings,” the directors said in the brief statement. Bloomberg reported that Qatar was unhappy with the Davis provision, but the fund’s yet to comment publicly. “We would like to see greater visibility into the role proposed for Mick Davis,” Bloomberg quoted Sanford C Bernstein analyst Paul Gait as saying. “He has played a crucial, driving role in Xstrata’s meteoric rise to date.” An all-out takeover would also deny Davis the roughly $A45.5 million in share-based payments he was ensured under the scheme of arrangement. Citing an unnamed source, Bloomberg later reported that Davis and chief financial officer Trevor Reid were prepared to step aside if Glencore’s offer proved to be fair to Xstrata shareholders. Glencore was thought to be preparing an offer to make public at the time this went to press, which would allow Xstrata to make a formal recommendation.

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Coal Asia Pacific

Brown coal fights back The brown coal industry defends itself over claims the carbon price will have no material impact on the sector.


ustralia’s brown coal-fired electricity producers have hit back at claims they are better off under the federal government’s carbon pricing scheme. This week, Frontier Economics released modelling showing the government’s recent decision to remove the carbon price floor from 2015 meant brown coal power stations would be between $400 million and $1 billion better off than if there was no carbon tax package. “What happened here was that the government compensated the generators on the basis of the Treasury price forecasts of carbon, which were prepared some time ago and since then the European price has really cratered, really fallen quite low and it’s expected to be low for some years to come,” Frontier Economics managing director Danny Price told ABC Radio. “The floor, as you can tell from earlier statements by the government over the last couple of years, was a critical part of the scheme and the removal of the floor meant that the compensation was no longer in line with the rest of the scheme parameters.” But Energy Supply Association of Australia chief executive officer Matthew Warren said the analysis by Frontier Economics was inaccurate. “This isn’t modelling, it’s back-of-theenvelope arithmetic,” Warren said in a statement. “It doesn’t consider the effect of crucial factors like weaker electricity demand and soft wholesale prices on the viability of these power stations. “Frontier has based its results on unrealistic assumptions, like assuming continued strong growth in energy demand when for the last five years it has been flatlining or falling. “More zero emissions renewable energy coming online to meet renewable energy target obligations will further eat into the production of these generators. “These are readily available facts that Frontier has chosen to ignore.” Warren said the real measure of the financial health of the generators was the difficulty they faced refinancing their operations over the past year. “The combination punch of a carbon price, soft wholesale electricity prices, weak


Cuesta upgrades Amberley resource tenfold

Come out fighting: Coal power stations.

demand forecasts and deepening market uncertainty are clearly hurting the bottom line of Australia’s coal-fired power stations,” he said. “For Frontier’s Danny Price to say on ABC Radio that generators are ‘jumping for joy’ is just astounding. “The reality is that all coal generators are facing big challenges and the carbon price makes their life harder not easier.” Climate Change Minister Greg Combet responded on Sky News by saying the government believed its own modelling was more accurate than Frontier’s “and we are very confident that our policy position is bang on track”. According to The Australian, New South Wales government-owned generator Delta Electricity said black-coal stations in NSW, Queensland and Western Australia would be worse off after the government scrapped its contract for closure program, which sought to compensate dirty power generators for closing around 2000 megawatts of high emissions intensive generation capacity in Australia by 2020.

Cuesta Coal added considerable weight to its Amberley coal deposit in September, posting an inferred resource of 54.7 million tonnes – a large step up from its previous 5.1Mt. Amberley, in Queensland’s Clarence Moreton Basin, was subject to a 17hole drilling campaign totalling 2040m in May and June, which was combined with 44 historic drillholes to produce the revised resource calculation. “We are very pleased with the results from the drilling at the Amberley project and overall at all projects so far this year,” managing director Matt Crawford said. “Each drill program completed by the company to date has resulted in significant increases in coal resources with two more drill programs to be completed at Yellow Jacket and Moorlands. “We are especially excited about the prospects at Yellow Jacket as we have intersected coal outside the traditionally known Galilee Basin margin at shallow depth.” Amberley comprises 12 sub-blocks covering an area of and is located 8km southeast of the Jeebropilly coal mine and 5km from the former producing Ebenezer mine, which produced both domestic and export quality thermal coal. “The company has been extremely busy since listing in May this year. We are hitting every target we have set ourselves and in some cases exceeding them,” Crawford said. Cuesta defined coal resources down to a relatively shallow depth of 150m totalling 138.5Mt across the company’s projects, with 44.3Mt at Thorn Hill in the Surat Basin and 39.5Mt at the Moorlands deposit in Western Bowen Basin adding to the upgraded Amberley resource.

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Peabody to defer projects Peabody responds to macro conditions by reducing capital expenditure, including deferring early-stage expansion projects in Australia.


eabody Energy has slashed its Australian production targets by 20% to 40 million tonnes by 2015 and deferred the expansion of three of its New South Wales and Queensland projects in response to the lower coal prices caused by the slowdown in China. Peabody chief executive officer Gregory Boyce told a conference in New York the company would also be responding to the changed conditions by seeking to increase productivity from existing Peabody chief executive operations by decreasing its reliance officer Gregory Boyce. on contractors. “The near-term view is cautious given decline in global commodity demand and pricing caused by recession in Europe, sluggish US growth and eased expansion in China,” he said. “We are responding to macro conditions by further reducing capital spending, deferring early-stage expansion projects, reducing growth volumes and continuing to aggressively manage costs.” The company will be reducing 2012 capital expenditure to about $US1 billion and expects to keep 2013 capex levels at or below 2012 levels. The 3 million tonne per annum open-cut expansion of the Wambo mine in NSW is “now outside of planning horizon”, the 3Mtpa pulverised coal injection coal expansion of the Queensland-based Codrilla mine has been deferred indefinitely and there will be a 12-month delay in the expansion of the Metropolitan mine in NSW. Boyce said Peabody would still be advancing late-stage projects to completion. The Wilpinjong mine expansion has been completed on time and on budget and has expanded Peabody’s lowest-cost Australian thermal mine capacity by 30% to 13Mtpa while the Millennium mine expansion is near completion and will double mine capacity to 3-4Mtpa. The Burton mine widening and extension is nearing completion and will move to new hard coal coking mining area in the third quarter. The North Goonyella longwall top coal caving technology will add high-quality hard coking coal volumes and the Eaglefield codevelopment will extend mine life and add to HQHCC production. The Middlemount permit has been received for eventual increase to 4Mtpa. Peabody still sees Australia as being central to its expansion plans in the future. “It supplies 60 per cent of the world’s seaborne metallurgical coal. It has a major competitive advantage with mines close to port and ports close to high-growth markets,” Boyce said. He added that Australia was the largest exporter of high calorific value thermal coal and Peabody’s Australian margins were greater than average US peer margins. “Australian coal assets earn valuations significantly higher than US counterparts.”

amm OCTOBER 2012

Cokal hopeful of direct ship-style operation at BBM Cokal has upgraded resources at its advanced Bumi Barito Mineral project in Central Kalimantan, including adding 7 million tonnes of indicated and 10Mt of inferred resources from the project’s J seam. Total resources at the project, 210km north of Palangkaraya, now stand at 7Mt of indicated and 70Mt inferred metallurgical coal. Cokal executive director Pat Hanna said : “This increase is 100 per cent premium coking coal, confirming our view that the coal quality of the BBM project continues to develop as a primarily coking coal project as we progress towards the east.”


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Flow control An engineering firm has launched a dewatering pump, promising to support job sustainability and economic growth. By Vetti Kakulas


ngineering company Weir Minerals has launched its latest dewatering pump to the mining and resources industry. The Multiflo MH-C2 high wall pump has been designed to protect people, the environment and mine assets. It was developed in response to industry feedback following the major flooding disasters of 2011 and 2012 in Queensland. Compared to its predecessor (the Multiflo MH which was released in July) the Multiflo MH-C2 can dewater mines at a much deeper level. It has a maximum flow rate of 200 litres per second at a maximum 100m head, while the previous edition had a maximum 90m head.

A booster option is also available, dewatering a maximum 200m head. Weir Minerals Multiflo managing director Paul Avey said the pump could quickly and safely get minesites up and running during times of flooding and other disasters. “With a flooded mine or quarry costing up to a million dollars a day in lost productivity, we believe the Multiflo high wall pump will be extremely well received by the industry – simply because of the urgent need for a robust and reliable high wall mine dewatering solution,” Avey said. The Multiflo has an “environmentally friendly” dual pipe system, which separates the hydraulic oil hoses from the dedicated discharge pipe and reduces the risk of oils contaminating the discharge water.

Weir Minerals’ Multiflo MH-C2 high wall dewatering pump.

“Operator safety and improved environmental outcomes were core considerations in the design of the Multiflo and we are very proud of what we have achieved,” Avey said. The heavy duty pump has hydraulically driven wheels, with a submersible pump head assembly. Weir Minerals said it would like to see a greater emphasis on pre-emptive dewatering strategies built into risk management policies to mitigate loss of jobs, productivity and lives. Based in Sydney, Weir Minerals Australia has offices and manufacturing facilities throughout the country. Weir Minerals is a division of The Weir Group based in the UK.



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Crushing & Conveying


Crushing & Conveying

Rapid expansion Customer service and a commitment to meeting customers’ production deadlines are driving a crushing and screening contractor’s expansion. By Alison Middleton


eliability and quality of service. These are among the qualities which are propelling a Western Australian crushing contractor’s expansion across Australia. Rapid Crushing and Screening Contractors has built up its business over the past 34 years, steadily gaining contracts with major mining companies and civil and earthmoving contractors. With a workforce of 150 people, the company provides crushing services to clients such as Thiess, Leighton Contractors, Moly Metals, Abbey Group, Brierty, Hanson (WA) and Karara Iron Ore. Specialising in the supply of crushing, screening and conveying based on either contract tonnage rates or hire basis, the privately owned WA company is expanding from its headquarters in Maddington, Perth. The company doubled the size of its offices and workshop facilities in 2008 to meet the increasing need for in-house facilities to design, fabricate, service and refurbish the plants and equipment. And with demand for the company’s services driving expansion, Rapid Crushing has now bought land in Mackay in Queensland with a view to opening its first office in that state. Business development manager Neil Constantine said: “We have a willingness to expand, to make ourselves an Australia-wide company within the next 12 months. “It comes down to a reliability factor. “We are able to produce what we say we can produce and meet production targets on time. “We have quality equipment and we’re meeting the demands of that particular market. “We are able to supply a quality product and service to junior iron ore producers and other gold and nickel companies.” The company specialises in crushing and screening all types of mineral ores, including iron ore, gold and nickel, with the human and capital resources to support operations without relying on outsourced facilities and manpower. Rapid Crushing has been working to increase its business through supporting major mining, construction and LNG contracts ongoing in the northwest of Western Australia.


A three-stage crushing circuit at Spinifex Ridge iron ore mining project in the Pilbara.

Constantine said: “We’ve won two longterm hematite iron ore contracts, one in the Pilbara with Moly Metals, and the other in the mid-west. “Business is good. We have the plant and the expertise to meet their requirements from between 1-5 million tonnes per annum. “It comes down to the ability to deliver the product and the service. That’s really where it all comes home.” All the company’s crushing equipment is designed, manufactured and maintained by its sister manufacturing company Irvine Engineering (WA) Pty, with plants custom-built to suit operational conditions on each project.

Rapid Crushing works with companies to advise whether a modular, fixed or track crusher would be best to meet throughput and production requirements. Clients are provided with the plant, equipment and personnel to crush and screen ore or quarry material, usually at a rate per tonne. “We’re building premises in Mackay to expand into the hard rock mining and quarry opportunities, both in Queensland and the Northern Territory,” Constantine added. “We’re setting up an autonomous operation over there to meet the demands and opportunities that exist on the eastern seaboard.”

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Crushing & Conveying

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range of hybrid crushers able to process up to 12,000 tonnes an hour has been launched onto the Australian mining market by Sandvik Mining. The crushers are capable of being used for primary, secondary and tertiary crushing applications, with the largest in the range able to take rocks of up to 1.8m in size. Sandvik said the CR810 series of crushers featured counter-rotating rolls with an aggressive tooth design and a compression action that allowed them to handle soft to medium-hard materials, which have a tendency to be wet and sticky. The CR810 can handle materials including coal, iron ore, overburden and limestone. Various ore types, lignite, bauxite, different types of phosphates and similar raw materials are also easily crushed by the machines, along with clay, chalk, gypsum and marl. Sandvik’s crushers were among the company’s equipment offerings which captured the attention of mining companies at the recent Queensland Mining Expo. Crushing and screening product support manager Marcus Benn said Sandvik was very excited about the CR810. “It’s classed a hybrid because we took two technologies – our double roll crusher and sizer – and combined them to create this one machine,” he said.

“It minimises the generation of unusable fine material and allows it to easily process wet and sticky grades.” – Sandvik Mining crushing and screening product support manager Marcus Benn “Our hybrid crusher concept features a very compact design, made possible by aggressive tooth geometry so that it requires minimal space. “With throughput capacities up to 12,000 tonnes an hour, it offers the advantages of a classic double roll crusher, including hydraulic gap adjustment and overload protection, combined in a single machine. “Its design also means it minimises the generation of unusable fine material and allows it to easily process wet and sticky grades.” The crushing rolls are driven individually by electric motors with coupling and gears and are equipped with an advanced hydraulic gap adjustment system. Sandvik said an integrated overload protection allowed for a wide range of product sizes, while the machine was protected against foreign bodies such as tramp iron within the feed material. In addition, the crusher rolls also act as flywheels, allowing them to


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The CR810 series of crushers has made its way to Australia after successfully running in Europe.

store energy and better compensate for peak requirements in crushing power. Benn added: “It’s been out for five years now, running in Europe. We’ve brought this hybrid out from Germany – it’s been running for the last year in Australia on a couple of sites, doing some testwork on uranium and iron ore. “We bought a pilot plot in Perth to do some testwork with Rio Tinto. Now we’ve brought it across to the east coast, hopefully to do some testwork on coal in the Hunter Valley. “The hybrid loves wet sticky material and that’s definitely an opportunity for us there.” Benn said with wet, sticky material, sizers generally had a tendency to back up and clog, preventing throughput from the machine and often leading production to be stopped for the sizers to be washed out before restarting work. “That’s a loss of production, which is obviously costly,” he said.

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“The hybrid hasn’t had that problem at all. It loves the wet and sticky material. “We feel it’s a huge opportunity for Sandvik to introduce this technology into the industry.” But the C810 series of crushers isn’t just aimed at the coal miners in the Hunter Valley. Sandvik is convinced the new offering will prove successful with iron ore miners in the Pilbara in Western Australia. “In the Pilbara, traditionally iron ore mining is done through jaws and cone crushers,” Benn said. “And no cone crusher in the world likes wet sticky material, especially in the tertiary application. So the C810 is ideal. “Not only can it effectively treat the material they’re having problems with, it’s also a [capital expenditure] saving if they put the hybrid in, versus a cone crusher.” Benn said the C810 was high capacity,

low profile and also ideal for underground mining. And in addition, the machine itself is only 3m high, which brings further cost benefits onsite. “Traditional gyratories are very large, heavy machines, and need a big excavation underground – and that’s very costly,” added Benn. “The hybrid is 3m high compared to a 15m machine, so there’s a very small excavation route required. “It ticks a lot of boxes, it’s easy to maintain. The sizers out there today, have a fixed roll and are prone to damage with digger teeth going through the machines – that happens all the time. “With a hybrid, you don’t have that risk so the risk of losing throughput due to downtime is a lot less.”


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Crushing & Conveying

Screening calls for change Fewer components and better serviceability are among the key highlights of the screens and feeders range launched by Western Australian equipment manufacturer Metso Minerals. By Alison Middleton


etso Minerals is marking the launch of its newest range of screens with a change to the way it manufactures the product for the Australian mining market. With the introduction of its Opti-flo screens and feeders, the Perth-based company said it would cease all in-house production of screen components. Instead, Metso will source components from Australian and global engineering fabrication workshops while its Carrington works in Newcastle, New South Wales, will continue to assemble, test and paint the screens. The company said the change of manufacturing model guaranteed Opti-flo would meet or exceed the level of quality and reliability the firm’s clients have come to expect from a Metso screen. With the new manufacturing model, Metso Minerals said the Opti-flo range would benefit Australian miners, with reduced delivery times, value for money and fewer components.

The Opti-flo range consists of banana, inclined and horizontal screens, as well as feeders and grizzlies. It also includes linear, circular and elliptical motion screens to suit most applications. Better serviceability and the improved availability of spare parts were also flagged by the company, while most of the components will be sourced from local fabrication workshops in the Newcastle area. Metso Minerals Australia capital equipment vice-president Max Wijasuriya said the launch of Opti-flo heralded a change to the way Metso manufactured screens for the Australian market. “As a global specialist in screening equipment, we are committed to providing our clients with great value for money, rapid delivery and one of the best technical service teams available in the mining and construction industries,” he said. “The launch of Opti-flo is a confirmation of this commitment to the Australian market. “Combining our market-leading crushing

equipment with the breadth of our new screen and feeder offer allows us to provide the Australian mining and construction industries with unrivalled solutions for their processing plants.” Metso said its screens were suitable for all mining applications and had been successfully used around the world in iron ore and coal mining, as well as copper, gold and base metals applications. Wijasuriya said the Opti-Flo range incorporated new technology which had successfully dry screened wet sticky ore. “We have had much success in South America and other areas around the world with this type of screen,” he said. “In addition, the new supply chain will allow reduced delivery times, optimised components leading to better serviceability and better availability of spare parts. “Our screens are suitable for all applications. We have a wide range of screen types that we specify based on what we believe is best for the application.”

Metso says its screens are suitable for all mining applications.

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Crushing & Conveying

Now for Australia American crushing manufacturer Cemco is promising to lure Australian customers with a promise of flexibility, focus and service. By Alison Middleton


n American manufacturer of crushers is moving into the Australian mining market with the launch of machines suitable for the toughest of environments. Cemco, based in New Mexico, said it had a long track record in the global mining industry, including at Uzbekistan’s gold mines and Venezuelan iron ore mines, with crushers that performed with consistency in challenging terrain. Recognising the individual properties and challenges of each location and application, the company said it had strong core values focused on servicing the customer and adding value to the industry. The company’s line of VSI crushers ranges from the Turbo 35 to the Turbo 175,

Cemco’s Turbo 128 V-Twin crusher offers greater power and a higher product output to miners.

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with product availability in diesel, electric, stationary and portable options. With the ability to process materials up to 6 inches in diameter, the Turbo 128 V-Twin VSI crusher is among the largest models in Cemco’s complete line of vertical shaft impact crushers. The Turbo 80 VSI crusher is a vertical shaft impact crusher, capable of processing a variety of aggregate and industrial minerals. The mid-sized model is able to be customised to miners’ specifications, from internal components to a portable or stationary configuration. “We offer the flexibility, focus and service that customers won’t find with other manufacturers,” Cemco president Neil Hise said. “The teamwork and dedication shows in the quality of work. It’s not a secret that our team is the key to our success. “Cemco VSI crushers are used in mining applications around the world from North America and Africa to Asia and Russia. “Our products are used in the production of aggregate from granite, silica, limestone and basalt as well as gypsum, coal, copper and gold. “Nearly every application, material and market has benefited from our VSI crusher technology. “Australia is a relatively new market for Cemco and one of concentrated focus moving forward. He said Cemco had tackled some of the toughest applications and the hardest rock in the world, as well as the most demanding production requirements, which translated into one huge advantage – knowledge. “Our team is highly experienced. There isn’t a challenge or application we haven’t encountered,” Hise said. “We understand the geological principles of rock and minerals and design our crushers to meet the most rigorous demands.” Capable of processing a variety of aggregate materials and industrial minerals, the turbo crushers are able to take piles of previously wasted, low-grade coal and crush it to a size that releases the energy and allows for combustion. Sixteen Cemco VSI crushers are used in the third largest gold mine in the world. Located in Uzbekistan, the mine processes 1.3 million tonnes per month of gold-bearing ore to a material size that allows chemical gold recovery. “Cemco crushers have a proven history of work in the iron ore industry. They are well accepted in that market because of their ease of maintenance and consistency is the size of the output,” Hise added.

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Mining Brief

An Aussie icon Xstrata mining has introduced a children’s book to create awareness for one of Australia’s most endangered species. By Vetti Kakulas


iving back to the community is important for most major mining players. It is particularly important for Xstrata, which has introduced the community partnership program Queensland, developed to allow communities to benefit from its operations in the short and long term. At its Queensland coal operations, Xstrata has identified one of Australia’s most endangered species. Located in the central Queensland region is the northern hairy-nosed wombat, a species found nowhere else in the world. The program has acknowledged this by launching The Flying Wombats Fun Book to raise awareness throughout the community for the rare species. It also donated $3.5 million to the charity organisation Save the Bilby Fund. The Flying Wombats Fun Book was recently launched on Threatened Species Day in Brisbane. Attending the launch were Xstrata Coal Queensland chief operating officer Reinhold Schmidt and Environment and Heritage Protection Minister Andrew Powell.


Schmidt said the activity book would help promote the efforts to save the critically endangered wombats. “Xstrata is proud to play a role in helping to save the northern hairy-nosed wombat,” he said. “We are also pleased to partner with the Department of Environment and Heritage Protection to establish a safe and sustainable future for one of Australia’s most iconic and endangered species.” The book incorporates activities for children and includes information about wombats and how they’re looked after to ensure their survival. “It’s important we continue our efforts in this regard as almost five years after we entered into this important partnership there are now two healthy wombat colonies supporting a total of 138 wombats – an increase from one colony and an estimated 115 animals,” Schmidt said. “The colonies, located at the Richard Underwood Nature Refuge near St George and Epping Forest National Park near Clermont, are the only known locations of these animals. “Our most recent contribution of $500,000 over 2011-12 will establish a caretaker

From left to right: Save the Bilby representatives Dawn Fraser and Frank Manthey, a Queensland Department of Environment and Heritage Protection ranger, Environment and Heritage Protection Minister Andrew Powell and Xstrata Coal Queensland chief operating officer Reinhold Schmidt. Photo courtesy of the Queensland Department of Environment and Heritage Protection.

program at the nature refuge and improve capacity to monitor the behaviour of the wombats.” Powell was pleased with the support from Xstrata’s program. “These rare animals now have a greater chance of survival thanks to Xstrata’s generous financial commitments to these projects,” Powell said. “Xstrata’s funding towards the establishment of a second colony at the Richard Underwood Nature Refuge was crucial to avoid an extreme event like fire, disease or severe weather wiping out the entire species. “While their numbers still remain at a critical level, it’s fantastic that the Department of Environment and Heritage Protection will have more resources at their disposal to help prevent these unique animals from becoming extinct.” Since its establishment in 2006, the Xstrata community partnership program Queensland has provided more than $30 million to programs benefiting the state’s communities. Based in Bahnhofstrasse, Switzerland and with an Australian head office in Sydney, Xstrata is a major producer of copper, coal, zinc, ferrochrome, zinc and nickel. It has operations throughout New South Wales, Queensland, the Northern Territory and Western Australia.

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Loadstar “Plus” Pullers For large pulling and extracting jobs

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Focus: Roy Hill project update

Laying the foundations Australia’s Mining Monthly takes a look at the latest developments at Hancock Prospecting’s Roy Hill project. By Thomas Smith

ins boW iDe: en excl bas Usiv in m e ap




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pof HaiRncocek m e t R a h e e n us Ri adds $13B Roy Hill to the Ho Gina


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onstruction is well under way at Hancock Prospecting’s $A13 billion Roy Hill project. As our photos show, the ground is being cleared as builders prepare to start work on the iron ore mine’s airport. The creation of an accommodation village to house 1200 workers is also gathering pace. In July’s edition of Australia’s Mining Monthly we featured a detailed analysis of what was described as one of the largest greenfield iron ore mines to emerge in decades. At the time, the only images available were artist impressions. But now, just a few months later, aerial

photographs of two key sites show that mining magnate Gina Rinehart’s majorityowned mining project is well on its way to becoming up and running. With an announcement expected on funding for the Roy Hill Project later this year, Hancock Prospecting has wasted no time in hitting the ground running. The company is currently conducting a significant recruitment drive for mine workers. If everything remains on schedule, the Roy Hill project will begin operating in late 2014, and aims to mine 55 million tonnes per year.

OCTOBER 2012 amm

An aerial view of the Brookfield Multiplex fly camp being built to facilitate construction of the mine site permanent accommodation village. An aerial view of the clearing of the centreline for the railway at Roy Hill.

Aerial view of the borrow pit for construction of the Roy Hill mine site airport.

ammOCTOBER 2012


Mining Brief

Bunbury’s new hoppers Qube Ports & Bulk has unveiled two mobile hoppers at Bunbury port, 175km south of Perth, Western Australia. The company said the hoppers would improve operational efficiency, minimise the environmental impact of material handling and improve safety for workers. Used for port side bulk material handling, the hoppers are “environmentally conscious”

and will be used to discharge a range of imported cargo, including petroleum coke, urea and ilmenite. Petroleum coke and urea are used by Bunbury’s local mining and fertiliser companies. The ilmenite, transported from the east coast, will be put through advanced refineries to increase the grade of product outputs.

Fitted with grizzly and load-out dust extraction, the hoppers will accommodate the handling of more than 300,000 tonnes of bulk product per annum. Bunbury port’s former hoppers, which were more than 30 years old, were a hazard to both employees and the surrounding environment. The new hoppers have an enclosed operator cabin and a truck engine noise of 65 decibels when idling. “The old chutes involved manual operation, which created the potential for injury from stiff opening handles and chutes,” Qube operations manager Glenn Gibson said. “Our new hoppers eliminate this issue, featuring advanced auto-raise chutes and baffle plates which keep all dust to a minimum, catching it inside the hopper itself, benefiting both our team and the environment,” Designed to Australian standards, the hoppers have remote controlled grabs with sealed leak-resistant buckets to ensure no dust and spills. “These hoppers improve sustainability while minimising clean-up time and increasing berth utilisation capabilities,” Gibson said. Qube said the hoppers reduced the total time of discharge, resulting in less set-up time and noise. Qube, which is based in Sydney, New South Wales, has port operations throughout Australia.

Qube Ports & Bulk has acquired two new hoppers for its Bunbury port operations.


OCTOBER 2012 amm


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Process Control & Monitoring

Project launch At a recent mining seminar, software technology experts explored ways of preventing project failure by utilising the right information. By Vetti Kakulas


nowledge is power. Information is key. Readers of Australia’s Mining Monthly will be well aware of the efforts made across the industry to cut costs and make operations leaner and more profitable. It’s a common theme. The good news for everyone reading this is that US firm Bentley Systems is taking the issue seriously. Very seriously indeed. So much so that information in mining was the central issue discussed at a recent conference held by Bentley Systems in Perth, Western Australia. Bentley’s annual Mining Collaboration seminar analysed the importance of using information for mine design through to its entire lifecycle. The seminar discussed the importance of managing people and processes, to minimise risks and reduce costs for mining companies. Bentley Assetwise senior industry solution director Brian Middleton said he had noticed a changing market for developing sustainable mines. “The market’s maturing and mining companies are recognising the power of managing information across the complete life cycle, including individual stages and

the development and maintenance of a mine,” he said. “The owner operators and engineering procurement and construction teams are coming together to make it happen, to be more efficient in the delivery of a sustainable mine.” Bentley Sea Winds Processing and Analysis Centre territory executive Alan Savin discussed the importance of the preproduction phase, due to large recordings of failure rate for mining projects.

In 2010, more than 70% of mining and minerals megaprojects failed. Research and recruitment company Independent Project Analysis revealed in its book, Industrial Megaprojects, that more than 70% of mining and minerals projects failed. The figure was derived from IPA’s database, which included information on more than 300 megaprojects, with an average cost of $2.6 billion, in 2010 terms. Savin said a cause of the failure rate was mining companies spending most of

their money during the early stages of engineering. “On these large jobs, one of the challenges is one [engineering, procurement, construction manager] trying to take it all on, rather than being comfortable in working in joint ventures, alliances or partnerships,” he said. “One of the other key items for common failures is the lack of solid control of good project information.” For project management to succeed, Savin said mining companies needed to have a good project information management system. Savin said there were five areas mining companies should focus on to avoid project failure. Optimising the engineering and procurement process, connecting and empowering teams, managing new risks, squeezing more value out of fabrication, constructing and commissioning and co-creating value thorough handover and operations. To help mining companies optimise projects, Bentley has released its i-model software. Savin says the i-model provides a holistic view on a project and can bring together 3D models. “There are multiple software vendors out there who create these 3D models, who



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haven’t been able to bring them all together into one integrated environment,” he said. “I-models allows you to do that, it brings together disparate 3D information. “You can bring together all these different disciplines and areas of a project, even if they have been designed using different technologies.” Bentley’s i-model, described as “information rich”, includes 2D or 3D geometry and business data. “The actual technology itself is called Enterprise Bridge, which holds it all together, it is the manager of all this information,” Savin said. Based in Pennsylvania in the US, Bentley has Australian offices in Melbourne, Sydney, Perth and Brisbane. Clients include Anglo American, Rio Tinto, BHP Billiton, Gold Fields and Fortescue Metals Group.

Bentley Systems’ i-model software combines drawings, data and models in one holistic view.

Loadrite’s C-Weigh delivers data for mobile weighing equipment, such as screens, crushers and stackers.

Take a load off To improve productivity at a minesite, it is important a mining company’s equipment can accurately weigh and measure materials. Which is why Loadrite has introduced the C-Weigh conveyor belt weighing system, designed specifically for mobile mining equipment. Loadrite is a subsidiary of New Zealand company Actronic Technologies and has one Australian office in Sydney. The C-Weigh identifies the weight of materials used on mobile crushers, screens or stackers. “Traditionally, belt scales have only been used on fixed, not portable, conveyor belts because the shorter length of portable

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belts has not been sufficient for accurate results,” Loadrite product manager Soeren Schramm said. The C-Weigh has been designed with portability in mind with rugged components and Loadrite says one of the main benefits is easy installation. “Loadrite’s C-Weigh scale provides a repeatable accuracy, which is not always standard in the industry,” Schramm said. “There is increasing demand for the ability to measure processes, production and performance right across a mining operation to ensure every part of the system is optimised for maximum productivity. “The scale frame is very well suited

for retrofitting and doesn’t require major structural modifications. It is tolerant of shock, vibration and extreme temperatures.” For viewing measurements, the digital display depicts tonnes per hour and total tonnes. A report can then be printed, using a hardy printer designed for the system, or it can be emailed directly to the user. Loadrite’s mobile scale can integrate with Wi-Fi and radio modems or cellular modems. The C-Weigh can also be combined with Loadrite’s Insight software, a web-based system which requires no hardware.


Mining Brief

Food for thought Queensland-based Downer Mining is supporting a Perth charity’s efforts to feed the city. By Alison Middleton Downer Mining WA chief operating officer Mike Sutton and Food Rescue general manager Samantha Wates.

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Food Rescue has saved over 95,000kg of food and provided over 191,000 meals,” she said. “Without the support of companies like Downer Mining, this would not be possible.” Downer Mining chief operating officer for Western Australia Mike Sutton said the donations reflected the company’s commitment to support the local Perth community. “There are many people in Perth who benefit from the growing mining sector but it is important to recognise that there are equally many people who are not so fortunate,” he said. “We are very happy to support an initiative that is tackling the important issue of food wastage in order to supply disadvantaged people with fresh and nutritious food.” Downer also recently donated $75,000 to the Brightwater Care Group in Perth to


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support the Oats Street complex which is being built to assist people who are recovering from severe brain injuries. Downer’s underground and exploration drilling team also awarded $50,000 to Tabubil Hospital in Papua New Guinea for the purchase of medical equipment. Downer’s donations follow the success of the annual St Vincent de Paul CEO Sleepout, which was backed by 1000 senior mining executives from across Australia and raised a total of $5.2 million. Chief executive officers in every Australian capital city were invited to roll out their sleeping bags and sleep outside on June 21, the longest night of the year, to raise awareness and funds for the homeless.

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risbane-based Downer Mining has donated $55,000 to a charity which ensures fresh food reaches disadvantaged people in Perth. The mining contractor is backing the Food Rescue initiative which provides regular food packages to charities throughout the city while combating the increasing issue of food waste. Food Rescue vans rescue perishable and nutritious food from supermarkets, restaurants and cafes then distribute food packages to more than 20 charity organisations, including the Salvation Army and Mission Australia. Food Rescue general manager Samantha Wates thanked Downer Mining for its generosity and said the funds would help Food Rescue continue its important work. “Since we commenced rescuing in late 2011,

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South Australian Minerals

The trade gateway A planned deep sea port in South Australia could be the first stage of a multi-billion dollar upgrade of the state’s infrastructure. By Alison Middleton


proposed deep sea port which would link South Australia with the global mining export market has reached a major milestone with the release of environmental guidelines. The South Australian government has released the environmental impact statement guidelines for the bulk commodities facility at Port Bonython on the Spencer Gulf. The Spencer Gulf Port Link Consortium, the preferred bidder for the project, has engaged strategic design and engineering firm Arup to prepare the EIS. The statement will address issues such as project management, environmental management and sustainability, rail and maritime access and community consultation. Preparing the EIS could take up to 18

months, meaning the proposed port could be ready for export in four or five years. Transport and Infrastructure Minister Patrick Conlon said the proposed facility would build on South Australia’s impressive reputation within the mining sector and provide a direct link from the state to the global export market. “Not only will this proposed development cement our status as a mining hub on a global scale, but it will bring significant social and economic benefits to South Australia,” he said. Planning Minister John Rau said the EIS would work to ensure the project met all the requirements prior to construction. “We appreciate and encourage community interest in this venture. These guidelines and the EIS will be subject to thorough

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processes aimed at ensuring the facility is environmentally sound,” he said. The proposed development is likely to include a 3km jetty reaching into deep water, with enclosed conveyors and a ship loader, and significant rail and storage facilities on land adjacent to the jetty precinct. It will be designed to handle ships carrying up to 180,000 tonnes of cargo. Construction of the project is expected to take about three years and employ about 400 workers. The Spencer Gulf Port Link Consortium comprises Flinders Port Holdings, Leighton Contractors, Macquarie Capital, BIS Industrial Logistics and ARTC. Flinders Port chief executive and consortium spokesman Vincent Tremaine said the release of the guidelines represented a significant milestone in the development of this “crucial” infrastructure project. “The release of the EIS guidelines is a key development for advancing the construction of the Port Bonython bulk commodities export facility, which is of major environmental, social and economic importance to South Australia,” he said. “It also triggers an exhaustive environmental assessment process, and follows the government declaring the proposed facility as a major project under the Development Act in March this year.” Tremaine said the state government’s EIS process would provide certainty to the South Australian community, investors and regulators in understanding the environmental, social and economic implications and opportunities the worldclass infrastructure project would present. “We will continue to work closely with the South Australian government to better understand the local and cumulative impacts of this and other major infrastructure projects emerging in the Upper Spencer Gulf,” he added. “SGPL looks forward to working together with the SA government and the community to enable the project to achieve all necessary environmental and planning approvals,” Tremaine added. The South Australian government previously said Port Bonython was the most appropriate location for the port, taking into account factors including water depth, land availability and its proximity to rail and proposed mining projects. Final design for the port will be dependent on issues such as geotechnical conditions, environmental controls, finalising user agreements with customers, a wide range of approvals and project financing. South Australian Chamber of Mines and Energy president John Roberts said the need for infrastructure extended to roads, water and power. But his forecast for the sector was one of thriving exploration, an increase in discoveries and production, and thousands of new jobs.

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An artist’s impression of the proposed deep sea port.

“I think we’re on the brink of a very rosy future,” he said. “It’s a really critical time at the moment, in that one of the significant challenges is the infrastructure required to develop the number of discoveries that have been made since the introduction of the PACE program,” Roberts said. “I think the ultimate solution to the funding of the infrastructure that is required is probably going to be a combination of government and private industry funding. “Hitting high on the list of the infrastructure requirements is the need for at least one deep water port nearer the resources. It’s a huge undertaking, for which the estimate for the capital required is billions of dollars.” But despite the huge investment in infrastructure required, Roberts said SACOME would be confident of 23 mines by

2015 and 40 by 2020, with the creation of an additional 14,000 jobs. “In South Australia now, the resources sector contributes 38% of our total state exports,” he added. “And sitting on top of that there is a big stockpile of very interesting and very exciting mineral prospects. “Clearly, we are in an industry that cycles, but we’re also in an industry that provides resources like copper and iron which, I believe, the rest of the developing world clearly and inexorably needs. “But the performance since PACE was introduced has been nothing less than super impressive, even to a wily old prospector like myself. “I see no reason why that can’t continue. The future looks pretty bright.”


South Australian Minerals

Cu in Chile Two global copper provinces have agreed to share data and expertise to foster growth and new discoveries. By Alison Middleton


partnership between South Australia and Chile could lead to the discovery of different types of copper. The SA and Chilean governments have agreed to share geoscience data and mineral exploration expertise with the aim of driving exploration. SA Mineral Resources and Energy Minister Tom Koutsantonis and Chilean Mining Minister Hernán Eduardo de Solminihac Tampier formalised the partnership with the signing of a memorandum of understanding at a recent ceremony in Adelaide. The MoU is between the National Geological and Mining Survey of Chile and the Geological Survey of South Australia, which is part of the state government’s Department for Manufacturing, Innovation, Trade, Resources and Energy Mineral Resources. DMITRE executive director Dr Ted Tyne said while South Australia and Chile both had world-class copper mineral deposits, they were of very different geological types. “The partnership could lead to discoveries of different styles of copper systems in South Australia,” he said. “We will now plan to undertake some formal exchanges between Chile and South Australia to investigate the opportunities for new copper deposits of different types and to exchange knowledge and ideas around exploration technology. “The world-class copper deposits in Chile are referred to as porphyry copper deposits and we haven’t discovered those yet in South Australia. “Our major copper deposits are referred to as iron oxide copper gold deposits. “The Chilean mining department and the industry there are also searching for our copper type in their own country.” Experts in SA believe there are Chile-style porphyry copper deposits in the state, while Chilean geologists believe there are IOCG deposits in Chile. Gaining the detailed geological history of Chilean rock types, major crustal structures and mineralising fluids will hopefully aid the search for porphyry deposits in SA. “We can’t be absolutely sure that these other style deposits occur, it always requires detailed exploration,” Tyne added.

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DMITRE chief executive Geoff Knight, National Geological and Mining Survey executive director Julio Poblete, SA Mineral Resources and Energy Minister Tom Koutsantonis, Chilean Mining Minister Hernán Eduardo de Solminihac Tampier, Department of Premier and Cabinet chief executive Jim Hallion and PACE senior project officer Maria Galatsanos.

He said SA and Chile had developed a very proactive international partnership approach over the past four years, which helped both areas to better understand the respective mineral systems.

“The partnership could lead to discoveries of different styles of copper systems in South Australia.” – DMITRE executive director Dr Ted Tyne “We’ve had a number of our expert geoscientists give international presentations at conferences on copper mining in Chile,” he said. “Through those engagements we’ve developed a professional working relationship. “One of the opportunities for us is to meet with explorers and miners in Chile who are experts in copper exploration. “By doing this, we will seek to attract them to South Australia to explore. “We already have one Chilean explorer, Antofagasta Minerals, and that company

is increasing its interest in South Australia and entered into a joint venture partnership with a company called Monax Resources.” Tyne said Chile was a world-class copper producer and exporter and SA aspired to be equally as important in the industry. “In the world of mining and geoscience, there is logic in the two jurisdictions working together to grow our knowledge, to grow the business of producing copper, which is such an important infrastructure commodity,” he added. The MoU is expected to last for five years. Koutsantonis said there was much to gain by sharing mineral sector intelligence, as SA had a great deal in common with Chile regarding growth of the mineral sector. “Chile has the world’s largest copper reserves and South Australia has 70 per cent of Australia’s known copper reserves, including three of Australia’s most significant new copper discoveries in the past ten years,” he said. “So this MoU is a logical step for us to continue the exchange of technical knowledge as part of reciprocal visits.”


Mining Brief The MAC’s new accommodation village at Gap Ridge, Karratha.

Operation Pilbara One of Australia’s largest mining accommodation companies has opened its first village in the Pilbara region of Western Australia. By Vetti Kakulas


ccommodation provider The MAC has unveiled the launch of its first village in Karratha, in Western Australia’s Pilbara. Plans are already well under way to expand the mining town from its current population of 18,000 to a regional city of about 50,000. Western Australian Minister for Regional Development Brendon Grylls recently attended the opening of the first development stage of the village, located at Gap Ridge. Featuring 208 rooms and a range of central facilities, The MAC says the village is unique, as 30 per cent of the rooms were developed for non-mining or resources sector guests. Grylls said the development would ease the current housing shortage in Karratha, helping to house construction workers needing a place to stay while they work on developing residential housing projects. Gap Ridge’s 14 hectare site has development approval to expand to a 1276 room village and will be developed in stages depending on the region’s accommodation demand. The MAC said the village was designed to ease pressure on Karratha’s existing facilities and hotels. “It has been a long-term aspiration of The MAC’s to be in the Pilbara and this is a significant milestone for the company,” The MAC managing director Peter McCann said. “The MAC’s success in operating in local regional areas is based on ensuring that we have the right local relationships and this is really important to us. “We will continue to work closely with the Roebourne Council and the local community as we develop the Karratha village further.” The Karratha village is The MAC’s second WA village, the other is a 232 room village located near Kambalda, in the Goldfields. Based in Sydney, The MAC has other offices in Perth and Brisbane. With about 600 staff located nationally, The MAC has more than 7200 permanent rooms in the Bowen Basin, Queensland, Narrabri, New South Wales, and in Kambalda.


OCTOBER 2012 amm

Focus: Commodity prices

Cap the costs Spiralling capital costs need to be curbed if Australian mining projects are to become more competitive. By John McIlwraith


ustralian resources will become less competitive if cost increases are not curbed. Five years ago, capital costs in the two giants of the field, iron ore and coal, were about the world average for new projects. They are now 60% higher for new thermal coal mines and 30% higher for iron ore projects. Port Jackson Partners, in a paper on the sector, warns that a bigger proportion of mines – including copper and nickel – are now in the higher cost range which, depending on demand, “may not be attractive to global customers”. It points out that in the past high commodity prices had contributed to more than half of

“Rising costs for new capacity will mean that future projects are less competitive and it will become more difficult to attract investment.” – Port Jackson Partners Australia’s mineral revenue growth. “With prices for most commodities, including coal, expected to have peaked for now, revenue growth and required rates of return will need to come from volume-led growth by developing new mine, rail and port capacity,” the paper noted. “Rising costs for new capacity will mean that future projects are less competitive and it will become more difficult to attract investment.”

For projects in some fields, more than twice as much capital has to be spent to build one tonne of new capacity than five years ago. For thermal coal it cost $61 a tonne in 2007, today the figure is $176 – the average for the rest of the world is $106 a tonne. The gap is less alarming for iron ore – the figure for Australia has reached $195 a tonne of new capacity, compared with a world figure of $150. Five years ago, iron ore projects cost

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about the same as the world average, thermal coal mines were about 15% cheaper to build here. Port Jackson Partners said that with policy changes Australia could capture the opportunities from sustained global demand and continue to attract investment for new projects. It urged the industry and governments to disclose the magnitude of cost risks for projects already in the development pipeline. It recommended other steps: • Continue to highlight the socio-economic contribution of resource industries to encourage policy reform. • Alleviate exchange rate pressure by considering a sovereign wealth fund, implement state and federal government surpluses and reduce infrastructure bottlenecks. • Address labour shortages by focusing on industrial relations regulations and increasing internal mobility and skilled migration. • Refocus industrial relations practices on productivity gains; better match skills education and skills training, foster innovation clusters and encourage more research and development. • Eliminate sovereign risk concerns by providing stable, predictable and

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Focus: Commodity prices

Lower: Operating costs need to come down if projects are to remain competitive.

internationally competitive taxation and royalty regimes; reduce red tape. In another area of concern to the resources industries, the Queensland Resources Council added a calming note to the debate over the future of the state’s Great Barrier Reef. It pointed to a report, produced by a federal government body, that predicted that the Queensland coal industry could export nearly a billion tonnes of coal by 2020. This would be a six-fold increase from the current level of approximately 166 million tonnes. The council pointed to a recent estimate by the respected Bureau of Resource and Energy Economics that coal production was likely to increase by that year to about 300 million tonnes and as much as 370Mt by 2025 – challenging figures, but much less alarming than the figure in the federal government report. More immediately, the council pointed to declines in mineral production in Queensland as early as the March quarter. Thermal and coking coal led the fall,


with high quality coking coal falling by 17% compared with the previous quarter, to reach $161 a tonne. Thermal coal experienced only a modest fall of 4% to $108 per tonne. For the quarter, coal production was worth $7.3 billion, a fall of 28%.

For projects in some fields, more than twice as much capital has to be spent to build one tonne of new capacity than five years ago. Major international factors contributed to a decline of 11%, to 39Mt. To place this in a wider context, New South Wales coal exports fell by only 3% and globally exports of coal declined by 9%. Defying the trend, US exports from the

main coal ports increased by 10% – still less than a third of Australian shipments. The global issues reducing Australian sales, according to the Queensland Resources Council, included a weaker demand from cement, power generation and steel producers in the face of weaker economic growth. A second factor was the surge in the production of cheaper shale gas in the US, which reduced sales of domestic coal and forced miners on to international markets. There are widespread expectations that the shale gas revolution will make the US an energy exporter and, within a few years, end its dependence on imported oil – with widespread political implications. A corollary to this of great importance to Australia will be the effect on our energy exports – coal and increasingly LNG. While Australia was still on target to be the biggest LNG exporter within a few years, competition from the US would be a disturbing prospect – with only the long lead times required for such ventures giving this country something of a head start.

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Mining Brief

Time for three The Port of Newcastle’s third coal terminal is continuing to expand, with the $1 billion second stage of development now open and work advancing on the third and final stage. By Alison Middleton


he world’s largest coal export port is continuing to ramp up its export capacity, with work to complete the $3 billion terminal now under way. Stage two of the Newcastle Coal Infrastructure Group terminal has officially opened and the third stage is scheduled to be completed in 2014. The first stage of the terminal, with a loading capacity of 30 million tonnes per annum, opened in 2010. New South Wales Ports Minister Duncan Gay officially opened the second stage, which has a 53MMtpa capacity. NCIG chief executive Rob Yeates said the opening of Stage 2AA on the 136-hectare Kooragang Island site was a significant milestone. “Works include a new rail unloading facility and rail sidings, an additional stacker-reclaimer and stockyards, additional conveyors and sample stations and an extra shiploader, at a cost of around $1 billion,” he said. “As well as increasing capacity for partners, stage two will be used by non-NCIG producers and will eventually bring export capacity from Newcastle Port to more than 180MMtpa.” Work completed to date has cost about $2 billion and Yeates said the third and final stage of the terminal would cost a further $1 billion. “The additional infrastructure to be constructed includes a fourth stackerreclaimer, a third berth and dredging, as well as the associated conveyor network,” Yeates added. “This stage of the project is now under way and on schedule for completion in 2014.” The final stage of the project involves the expansion of capacity to 66MMtpa, the full approved development profile of the NCIG site. And as the expansion ramps up capacity into 2013, the total coal export capacity for the Port of Newcastle will exceed 180MMtpa. NCIG was formed in 2004 to address capacity issues associated with coal handling facilities for regional coal exporters. The New South Wales government granted approval for construction of the terminal in 2007. The members of the consortium are all significant coal producers who have projects

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Export capacity is ramping up at the Newcastle Coal Infrastructure Group’s $3 billion three-stage terminal.

to materially increase their coal production to be shipped through the new terminal. Partners in the project include BHP Billiton (through Hunter Valley Energy Coal), Peabody Energy, Centennial Coal, Yancoal and Whitehaven Coal.

“The additional infrastructure to be constructed includes a fourth stacker-reclaimer, a third berth and dredging, as well as the associated conveyor network.” – Rob Yeates NCIG During the opening ceremony, Gay officially opened the Port of Newcastle’s $3.5 million operations centre which houses maritime vessel tracking systems. “The Port of Newcastle is recognised as being the world’s largest coal export port and an economic driver for the Hunter region,” Gay said. “This modern building ensures Newcastle Port Corporation will maintain its operational excellence and be able to handle increasing

exports and imports. “Newcastle Port Corporation just announced a record 12th consecutive trade record and about 4150 vessel movements on an annual basis. “It is this type of momentum that deserves modern facilities for a highly competent and professional group of operational employees.” Construction started in 2011 and vessel traffic information officers have been familiarising themselves with the new equipment and systems to maintain 24 hour a day communication with vessels and port operators. “Newcastle Port Corporation has been increasing both employee numbers and facilities to handle the expanding trade through the port,” Gay added. “The old operations centre was a twostorey building constructed in 1959. “It underwent a number of modifications before no longer being capable of accommodating operational services required for a port the size of Newcastle.” The port’s 2011-12 trade throughput was 128.6Mt, an increase of 13.6Mt on the previous financial year. Increased trade was recorded for aluminium, coal, fuels, general and bulk cargoes, grains, mineral concentrates and steel products.


Focus: Rio Tinto

Long haul with China Rio Tinto is testing four Chinese haul trucks at a mine in Western Australia. If the trial is successful, it could signal China’s arrival in the mining equipment sector. By Stephen Bell


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FIVE KEY FACTS • Rio Tinto is testing four Chinese haul trucks in the Pilbara • The alliance is between Rio and Chinese truck maker XEMC • It is the first time Rio has bought custom-built trucks from China • Rio is increasing spending on Chinese services and materials • The miner expects to spend $1.5 billion on China purchases this year


o paraphrase the late Neil Armstrong, it is one small step for a mine but a giant leap for mine supply. It is one way of looking at Rio Tinto’s latest equipment innovation in Western Australia’s Pilbara: teaming up with a Chinese manufacturer to test four

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purpose-built haul trucks at one of its oldest Australian minesites. The 230-tonne trucks, manufactured by Xiangtan Electric Manufacturing Corporation, left China in late May and were expected to begin operating at Rio’s Tom Price iron ore mine in August for three years of field testing. The trials will break new ground in a couple of respects. For starters, they are part of Rio’s rapidly growing procurement from China, a trend mirrored by other big Pilbara miners BHP Billiton and Fortescue Metals Group. Given that China is their biggest customer by far, it only makes good business (and political) sense to plough some of those chunky iron ore profits back into the Chinese economy. Rio Tinto, for instance, expects to outlay $1.5 billion on purchases in China this year, up from $1.2 billion last year. The expanding two-way trade is


Focus: Rio Tinto

The 230-tonne Chinese XEMC haul truck.

also part of Rio’s continued fence-building activities after its relationship with China faltered after the global financial crisis. The truck deal heralds the latest push by China into the world’s $US60 billion mining equipment market, of which haul trucks are a significant component, particularly in the big Australian iron ore and coal mines. It is the first time that Rio, the Pilbara’s biggest iron ore exporter, has received custom-built, fit-for-purpose trucks from a Chinese manufacturer. It is also the first time XEMC has exported trucks overseas. So the global mining truck business, currently dominated by the likes of Caterpillar in the US and Komatsu in Japan, will be watching the Tom Price trial like hawks. China has, in the past decade, made huge inroads into many manufacturing sectors, including the general automotive market. One in four cars produced in the world now comes from China, making it easily the world leader. Six years ago it was only the third biggest. Now, courtesy of Rio’s Pilbara experiment, the far more specialised mine haulage sector – off-the-shelf iron ore haul trucks normally sell for $A4-5 million each – may be up for grabs by the Chinese innovators. China’s incursion into the field comes at an important time for Rio, which is about to significantly spice up the Japanese component of its operations. Komatsu supplies the majority of the miner’s Pilbara haul fleet, including 10 “driverless” 930-E trucks. Rio plans to take delivery of 150 more automated units in the next three years to


coincide with its 353 million tonne per annum expansion. These will be spread across several minesites, believed to include Nammuldi and new projects Koodaideri and Hope Downs 4. By mid-decade roughly half of Rio’s Pilbara haul trucks will be automated Komatsu units, which are designed to improve safety and efficiency.

“Autonomous haulage is an important component in our ‘Mine of the Future’ program.” – Rio Tinto Iron Ore chief executive officer Sam Walsh In July the Komatsu driverless trucks, which have been tested for 3.5 years, began hauling iron ore at Rio’s Yandicoogina operation and will haul high grade ore at the Junction South East pit, marking a step towards full deployment. They will work in tandem with the group’s Perth-based operations centre, which integrates and manages the logistics of 14 mines, three ports and two railways. “Autonomous haulage is an important component in our ‘Mine of the Future’ program,” Rio Tinto Iron Ore chief executive officer Sam Walsh said. But a big part of the miner’s longer-term future in the Pilbara may consist of Chinesebuilt trucks, should the new trial succeed. And some of the trucks may find homes beyond WA.

West Africa could be one of those destinations, given that Rio is teamed with China’s Chinalco at the giant Simandou project in Guinea, due to begin production in 2015. Several senior executives from both Rio and XEMC, together with Australia’s Chinese ambassador Frances Adamson, attended a ceremony in Xiangtan, Hunan province, to celebrate the recent shipment of the trucks. “Rio Tinto’s vision is to become the preferred partner, customer and supplier to China,” Rio Tinto China managing director Ian Bauert said. “This cooperation with XEMC is a significant opportunity to increase our role as a customer of Chinese industry.” Rio Tinto Pilbara Mines chief operating officer Tom Palmer said the miner had worked closely with XEMC in ensuring the trucks met the tough specifications needed to operate in northwest WA’s harsh conditions. “I believe these trucks will play a vital role and contribute to our growth programs in the Pilbara,” he said. Meanwhile, XEMC Group chairman Zhou Jianxiong saw the shipment as an opportunity for the Chinese manufacturer to enhance its competence in the truck market, while increasing its cooperation with Rio. The project marks a “new step that the Chinese heavy-duty equipment made for the global market”, he said. Rio and XEMC forged a collaborative partnership in May 2011. Now XEMC is establishing a subsidiary in Australia to assist with the haul truck project, while assessing further opportunities for cooperation. Rio Tinto Procurement emerging markets general manager Mark Rivers said part of the deal’s rationale was expected cost savings over time, together with “improved security of supply”. It also reflected the advances in technology and innovation across Chinese industry, he said. China is already a major supplier of other heavy equipment to the Pilbara. Rio has purchased thousands of rail cars from Qiqihar Railway Rolling Stock Co in recent years. It is estimated that roughly a third of Rio’s Pilbara rolling stock is now Chinese-made. It is an updated version of the decades-old joke about Australia exporting iron ore to Japan, only to see it come back in the form of Toyota and Nissan cars. Now China has taken over the mantle, supplying us with cars, rolling rail stock, heavy equipment and now haul trucks. Rio’s official comments on its rising Chinese purchases are sprinkled with the traditional marketing jargon, such as building “strong relationships with key suppliers”. But the 25% jump in spending this year also reflects the work Rio and CEO Tom Albanese had to put into repairing a relationship with China that deteriorated sharply after the GFC. First off was Rio’s last-minute snubbing of Chinese government-controlled Chinalco

OCTOBER 2012 amm

over a mooted share placement in 2009 that would have seen it double its stake in the miner. After queries about the potential for Chinese influence on the board, Rio instead pursued a discounted $US15 billion rights issue to pay down debt for its ill-advised Alcan acquisition. Later that year Chinese authorities arrested Rio Tinto Iron Ore China operations head and Australian citizen Stern Hu, along with three of his Chinese colleagues on charges of bribery and stealing state secrets. This explosive development, which generated a diplomatic chilling between Australia and China, was linked to a stoush between Chinese authorities and the world’s three big iron ore miners – Rio, BHP and Vale – over iron ore pricing.

It is estimated that roughly a third of Rio Tinto’s Pilbara rolling stock is now Chinese-made. The Hu affair forced Rio to overhaul its marketing operations in China, while it also ramped up officially sanctioned Chinese alliances as a bridge-building exercise. The company entered two joint ventures with Chinalco: Simandou in Guinea and a rare exploration venture in mainland China – alliances Rio promotes as “mining knowledge transfer” to its partner. At Simandou, for instance, the Chinese group will learn how to develop and run a big iron ore mine. The lesson is sorely needed, judged by CITIC Pacific’s multibillion dollar cost overruns and delays at the Sino Iron magnetite venture in the Pilbara. As fore Rio’s growing “buy China” policy, company insiders insist it is not just about cuddling up to its biggest customer. The reality is that China’s manufacturing ability has improved so much in the past five years that it leads the pack in many sectors. “They deliver and they get good at it really quickly,” one source said. Chinese procurement is a strategy that other Australian iron ore miners have emulated. In July 2011, for instance, FMG made its first Yuan-denominated transaction in China after the company bought supplies using one of its local accounts. The miner went on to buy large amounts of heavy equipment for its Solomon expansion in the Pilbara, due to come onstream next year. It included heavy fabricated items, such as stackers, conveyors and crushers, alongside rail wagons, port gear, etcetera. But like its bigger competitors, FMG was forced to look elsewhere, including the US, for mobile mining equipment, including haul trucks.

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Set sail: XEMC haul truck loaded for the journey.

At Solomon, FMG plans to use Caterpillar automated trucks in a dedicated area of the project. The mine could be running 45 of the automated units by 2015, according to the US equipment maker. At the time of its Chinese currency deal, FMG MD Nev Power uttered what proved to be a prophetic comment about trucking. “China isn’t really into mobile mining equipment as yet – I’d expect to see that emerge over the next few years,” he told AMM. “Currently they don’t market a mining

truck at all. They do make some for their domestic market and I understand that one of the companies is looking at a trial production model … sometime in the next 12 months.” Funnily enough, those 12 months just expired and the first Chinese-built haul trucks have just landed in Australia via Port Hedland. So, along with executives at the big equipment makers, Power will be a very interested observer of his mining neighbour’s latest Chinese alliance.

Chinese haul trucks on their way to Australia.


Mining Brief


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Stay in the Goldfields Mine workers without formal qualifications could broaden their career prospects as part of a drive to retain skilled staff in the Goldfields. By Alison Middleton


new training program is trying to give workers in the mining industry the same skills set they would have gained if they’d gone to university. The purpose of the ambitious scheme is to plug the ongoing professional skills gap in Western Australia’s Goldfields. Workers already employed in the mining industry who have no formal university degrees will be invited to apply for a place on the mining engineering paraprofessional program. Goldfields Institute chief executive officer Mellisa Teede. If successful, they will have the opportunity to gain a wide range of mining engineering, technical and professional qualifications. It marks the culmination of a year-long collaboration between the Goldfields Institute of Technology, Curtin University’s Western Australian School of Mines and the Chamber of Minerals and Energy of Western Australia. WASM and the Goldfields Institute will roll out the program, which aims to help local companies attract and retain experienced staff while course participants broaden their qualifications and career opportunities. Goldfields Institute of Technology chief executive officer Mellisa Teede said filling professional skills gaps represented a significant challenge, given that unemployment in WA was at an all-time low. “Re-skilling and up-skilling the existing workforce is an important strategy in meeting labour demand,” she said. “Another positive feature of the model is the support programs that will be provided to allow school leavers, migrants and members of the general workforce – who may have previously been prevented from undertaking engineering studies due to gaps in these essential prerequisite skills – to potentially gain entry to WASM engineering programs.” Candidates are expected to have up to six years experience in mining or related industries and are nominated by their employers. A total of 30 workers have already enrolled in the inaugural course, which started in September and was delivered by the Goldfields Institute’s Centre for Engineering and Mining Training, which is affiliated with WASM and the CMEWA. It comprises a limited number of residential classes in KalgoorlieBoulder, with most of the course material delivered online and on the job over a period of 18 months. CMEWA CEO Reg Howard-Smith said: “The development of courses which are responsive to industry needs is critical to the future growth of the resources sector.”

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Goldfields Mining Expo

GME has just the job Good things come to those who wait. First held in 1984, it’s been two years since the last GME. It’s no coincidence that GME is held in Kalgoorlie-Boulder, given the rich history and connection the town has to the gold and metals industry. Australia’s Mining Monthly has been keeping

a keen eye on who’s attending GME 2012. Regular readers will be familiar with the importance AMM places on the skills and labour issue across the Australian mining industry. Clearly, the organisers of GME consider this too to be important enough to make it a central theme of this year’s event.

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So much so that a careers centre is to open its doors at GME for the first time. The aim of the service is to provide a bridge between the mining industry and local people. Women and indigenous people will be urged to consider a career in the sector. South African company AngloGold Ashanti is among the companies that will be fielding specialist recruitment staff at GME to boost worker numbers at their goldfield operations. The miner will be actively recruiting workers for both its Tropicana and Sunrise Dam gold mines in WA and applications are being sought for a variety of roles, with about 80 vacancies to be filled across both sites. AngloGold Ashanti holds a 70% share of the Tropicana gold mine in a joint venture with manager Independence Group NL (30%), and the companies will be seeking applicants for a further 60 jobs at the site from early next year. People considering making the move into a career in mining are being encouraged to visit the career centre to find out about the wide range of professional roles and trade jobs, current vacancies, the qualifications required, and the packages on offer.

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AngloGold Ashanti vice-president corporate affairs and human resources Andrea Maxey said the career centre would give AngloGold the opportunity to promote employment at its mine sites in the goldfields to local residents and indigenous people in the Kalgoorlie area. “We don’t often get the opportunity to meet with a lot of people and explain all the different types of work that is available on mine sites,” she said. “We’re actively trying to encourage local employment at our mine sites and we’ve actually set up fly-in, fly-out operations out of Kalgoorlie for both Sunrise Dam and Tropicana gold mines. “It’s very important to us to involve the local community in our operations, both in

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Geologist Sophie Lee underground at the Sunrise Dam Gold Mine. Lee joined AngloGold Ashanti Australia as a graduate. Photograph by Karl Schoemaker, used courtesy of AngloGold Ashanti Australia.

terms of employment and in providing services to the mines. “There’s a whole range of roles available. At GME we’re going to be in a recruitment phase for people to work in the processing plant at Tropicana and we’re actually advertising at the moment for trainee process technicians. “We’ve only advertised those roles in the goldfields and nowhere else, because again we wanted to make that opportunity available to local people. “There are opportunities where they can learn to become process technicians through on-the-job training, and they don’t need any experience to apply. “We hope to give people more of an opportunity to have one-to-one conversations with us that they wouldn’t get through the normal job advertising process. It’s a bit less formal.” Around 230 exhibitors will take up 6500sq.m at Kalgoorlie-Boulder Racecourse, while organisers are hoping to build on the 3000 visitors who attended the 2010 expo.

“We don’t often get the opportunity to meet with a lot of people and explain all the different types of work that is available on mine sites.” – Andrea Maxey Services, equipment and products will feature at the expo, along with community events and information sessions, including the popular Women in Mining Day. Reed Mining Events exhibition director Paul Baker said he was delighted that AngloGold Ashanti had come on board for the career centre at GME. “At GME, because it is very regional, and there are a lot of mining companies looking for skilled workers, it was a great opportunity

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Goldfields Mining Expo to partner with them and provide them with facilities onsite,” he said. “It all started when we considered how we provided services to the mining companies, and how we provide facilities onsite to help them meet their challenges. And careers is a big challenge for them.

Around 230 exhibitors will take up 6500sq.m at Kalgoorlie-Boulder Racecourse. “This is the first time it’s been done at GME, it’s a new element. AngloGold Ashanti is the first company we have secured and they will have a dedicated area and facilities, which they will utilise to speak to potential employees. “They might be electrical engineers, or they might be operators or geologists. We do get a lot of apprentices at the show who are looking to learn about innovation and opportunities as well.” With Kalgoorlie increasingly becoming a fly-in fly-out workforce, this year’s exhibition will also boast support and advice sessions for miners and their families.

Geotechnician Cissy Wolgar with AngloGold Ashanti’s Australian exploration team. Photograph by Karl Schoemaker, used courtesy of AngloGold Ashanti Australia.

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Goldfields Mining Expo

Introducing even more power The world’s most powerful raise drill will make its international debut at GME.


ne of the main attractions when GME starts later this month will surely be the world’s most powerful raise drill. Contract mining company Macmahon is heading to GME to promote its custombuilt RBR 900VF, which is at least 50% more powerful than any existing raise drill. The one of a kind machine, which has just finished construction in Germany, could change the way mines are designed. With a continuous operating torque of 900 kilonewton metres and a thrust capacity of 22,000 kilonewtons, the rig can create a shaft with a 6-8m diameter to a depth of up to 2000m, depending on ground conditions. Macmahon said it expected the RBR

900VF would be operating either in Australia or overseas before the end of the year. Senior advisor Russell Wood said: “It is the biggest machine ever to be built. It’ll be 50 per cent stronger in terms of thrust and 25 per cent stronger in terms of torque than anything else ever built. “It enables the rig to dig far longer, delivering a far bigger diameter of holes and ultimately it’s going to change the way people design mines. It’s a matter now of making people aware. “At GME, we will show clients a presentation we’ve developed over the past few months showing how the whole rig works and is transported, explaining the functions of the machine. “I’m sure there will be a lot of eyes opened

and people will be thinking about how they design their mines and how they can factor in this machine.” Wood said he anticipated the rig would boost productivity and efficiency for miners. “Most rigs just can’t load the cutters up to the extent that’s necessary to break the rock efficiently,” he said. With a self-propelled transport mechanism allowing it to be moved along on crawlers, the machine is easily transported, despite its size. “In terms of raised drilling, which is very much a niche, it is going to be a big deal. Nothing like this has been developed for quite a few years,” he added. “A lot of people have talked about it but Macmahon have been the ones to build it.

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Macmahon’s RBR 900VF – the world’s most powerful raise drilling machine.

“We’re tendering for work in South Africa with a view to using the RBR 900VF on the project.” Wood said when it came to drilling holes of a particularly large diameter, miners had to consider alternative means of construction without a machine capable of doing the job. “This will give the ability, in the right ground, to ream the hole to the full diameter, which will make it a far safer construction,” he said. “This will be far more efficient on a time and cost basis.” The rig joins Macmahon’s existing fleet of 13 raise drilling rigs but will offer the ability to drill longer holes in a single pass – avoiding costly mid-level development that is required with existing machines. Miners visiting Macmahon’s stand at GME will hear the rig uses 381mm diameter drill rods made from high strength steel, giving greater operational safety margins, with rod and thread designs matched to the rig’s ultimate capabilities. The RBR 900VF also has the ability to load the cutters to higher thrust loads over greater depths, resulting in a more efficient cutting process on large diameter reamers. Macmahon said the rig would also alter the risk profile associated with raise drilling operations and provide greater flexibility for miners when it came to long-term hoisting and ventilation options for deep mines. Executive general manager underground Greg Miller said the RBR 900VF rig was purchased after Macmahon recorded significant growth in inquiries from operating mines seeking larger diameter deeper shafts, both in Australia and internationally. “Machinery currently available across the industry was limited in the load that could be applied to the cutters while still having the torque to rotate the reaming head,” Miller said. “Adequate weight per cutter is required to ensure the efficient formation of chips and this is the fundamental requirement for mechanical excavation by the raise drilling process. “We needed a machine that could provide the load needed for efficient breaking and the torque to turn the head.” German tunnel boring machine manufacturer Herrenknecht AG was chosen to develop the machine. Macmahon raise drilling operations manager Kim Anderson, who has 40 years experience in raise drilling, liaised with Herrenknecht to develop the specification for the “big rig”. “Herrenknecht was an obvious choice to work with in developing the new machine,” he said.

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“They have vast experience in the mechanical excavation of tunnels, coupled with heavy engineering design and manufacturing capability.”

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Goldfields Mining Expo

Get your bearings Specialist bearings manufacturers Cooper Split Bearings and Kaydon Bearings have joined forces for GME.


oldfield mining companies heading to GME this year will be offered the benefit of a combined 176 years of experience in bearings design and production. Cooper Split Bearings and Kaydon Bearings, who are both part of the US-based Kaydon Corporation, have joined forces to promote their products to the Australian mining market. The companies plan to offer an increased range of specialist bearings for key applications, including material handling conveyors, ventilation shaft and air movement fans, crushing and milling, hauling and winding. Companies also use the bearings during stockpile and surge pile management, screening, sizing and ore washing.

“Cooper products save downtime and increase productivity for mine sites,” Cooper national sales manager for Australasia Stuart Goates said. “We’re doing very well with mining customers in coal, gold and iron ore. In the goldfields they are increasingly being used. “We’ve definitely seen an upturn in sales. We have seen a 50% growth over the past 18 months and we expect that to continue through attending events such as GME. “It’s the first time we will have attended GME. We’re hoping to raise awareness of our products. “Either on the surface or operating underground, Cooper’s products continue to perform in the most hostile and challenging environments.

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“Cooper Split Bearings is the global leader in split-to-shaft bearing technology. “The split feature means maintenance and replacement is cut to a minimum, while the superior sealing promotes longer bearing life. “As a result, business profitability is increased.” Goates said that for more than 60 years Kaydon Bearings had been a leading US maker of slew ring bearings, ranging in size from 10cm to more than 6m in diameter. Kaydon specialises in mining and heavy machinery applications such as mining shovels, excavators, reclaimers, stackers, port ship loader cranes, forestry equipment and aerial platforms.

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Goldfields Mining Expo

dig deeper in the ground. not your pocket.

East to west Rio Tinto, BHP Billiton and Xstrata are among the list of clients using Automation IT software. Goldfields mining companies are next on the list.


multi-faceted approach to control system engineering services could help Goldfield mining companies improve mine site efficiency. Engineering services company Automation IT has already gained customers, including Rio Tinto, BHP Billiton and Xstrata, with its industrial software systems. Customer demand has prompted an expansion beyond Queensland and the firm is headed to GME for the first time with the aim of moving into the market.

“The majority of our business is repeat business. We aim for a long-term relationship with clients.” – Frank Greenaway

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Based in Springwood, Queensland, the company opened an office in Perth, Western Australia, earlier this year as it increasingly turned its attention to capturing business from major miners operating in the state. Automation IT provides services such as enterprise resource planning integration, alarm rationalisation and downtime analysis. Control system software change management, equipment condition monitoring and custom applications for tablets and smart phones are also provided by the firm. Business development manager Frank Greenaway said the services Automation IT provided to mining companies were critical.

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Automation IT worked to improve the efficiency of multiple draglines and shovels throughout BMA’s mine sites, including the Saraji mine in Queensland’s Bowen Basin.

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“It makes them a lot more efficient and safer,” he said. “The majority of our business is repeat business. We aim for a long-term relationship with clients. “It will be the first time we’ve been to GME. We’re trying to get a feel for the mining industry in Western Australia, and particularly in the Goldfields area. “We’ll be trying to make some contacts and meet people who are working on site.” Experienced staff will be on hand at GME to talk Goldfields mining professionals through previous case studies and demonstrate the services available to miners. Automation IT believes the new Perth office gives it a strategic position to provide the best possible solutions for customers throughout Western Australia. Business development director Geoff Bladon said: “The company has a strong presence across the Australian mining industry, with experience in both metalliferous and coal open-cut and underground mines. “Customised solutions for a range of problems faced by both operations staff and management of large organisations are a speciality of Automation IT.”

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Goldfields Mining Expo

Water friendly A water evaporation and algae inhibitor will be released to the mining public at this year’s GME.


n evaporation and algal control system can reduce evaporation loss from water storages at mine sites by up to 88%, according to a conservation company. Aqua Guardian Group will be unveiling its AquaArmour system to miners when the company attends Goldfields Mining Expo for the first time. Made in Melbourne, Victoria, the system can reduce the water body temperature, inhibit algal growth, suppress wave action and reduce bank erosion. Mining is a new market for the white hexagonal modules, which are made from food-grade, high-density polyethylene. Measuring about 1.2m wide, the modules are double-sided and weigh about 3.8kg

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when empty. Ballasted with 80kg of water when in use, they resist wind gusts and sustained winds of up to 200km/h. AquaArmour national sales manager Danny De Graaf said the modules were environmentally friendly and could be deployed to cover 80% of a total water surface area. “There are a number of applications that a mining company would deploy AquaArmour for,” he said. “Raw water storages on a mine site are typically very large and they suffer huge evaporative losses, particularly in Western Australia. “Evaporation loss on a country’s potable water supply is enormous and expensive. In Australia alone, evaporation loss represents

The AquaArmour evaporation and algal control system can reduce the loss of water through evaporation.

about four times the country’s total annual rainfall, and water quality issues such as algae are huge.” De Graaf added: “AquaArmour has been independently proven to save 88% of evaporation loss and inhibit algae growth.” De Graaf said installation was simple and maintenance minimal and the modules did not require cables or tethering. “There are no energy requirements once deployed, unlike desalination and wastewater recycling,” he added. “For example, just 1 hectare of AquaArmour deployed in WA will ... save between 37 and 58 megalitres a year for the next 20 years, with no ongoing energy costs or infrastructure requirements.”


Goldfields Mining Expo

Keep it down Goldfields miners are being urged to consider a new way of controlling dust and erosion on mine site roads. By Alison Middleton


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ining companies in the Goldfields will hear of a new way of treating roads to tackle dust and erosion. Betta Roads is heading to GME to unveil a dry spread application method for its PolyCom stabilising aid. Supplied in a powder form, Polycom is used to stabilise earthwork materials and is conventionally spread with a water cart, grader and roller. The application method involves surface scarification on the road and then dry spreading the prescribed dosage evenly. Betta Roads already counts mining companies including Rio Tinto, BHP Billion and US aluminium major Alcoa among its clients. And while the product is used by miners across Australia, the firm, which is based in Perth, Western Australia, is attending GME for the first time to encourage companies to try the dry application method. Betta Roads director Paul Bright said the company was hoping to get a positive response to the product when it was promoted to Goldfields miners. “The new dry spread method of PolyCom for stabilising mine site haul and access roads is proving popular with our clients as the process negates the need for the crew to deviate from traditional rip and recompact methodology,” he said. “From haul roads to access tracks and everything in between, PolyCom is ideal for remote area works where sourcing good materials is difficult. “Mining companies use the product to strengthen the road and to reduce dust on a road. “Typically, they’ll spray raw water onto a road, and that’s fine. “But if you put the polymer concentrate into the water then you can half the amount of water you use. “Mixing the polymer concentrate into the raw water turns the water into a co-polyacrylamide, then you spray that onto the roads. “In very small concentrations, it takes twice as long for your water to dry, which means you can half as much water on the roads to reduce dust.” Bright said that PolyCom-treated roads better withstood water and traffic damage, with substantially longer intervals between grading and maintenance. Other benefits included significantly reduced costs and water usage and stockpiled material can be pre-treated before transportation to site. About 2kg of PolyCom treats 50 cubic metres onsite. PolyCom’s elimination of oxygen pockets within the compacted material strengthens the road, with same day results meaning minimal interruption for mine traffic. “The dry spread method is a simple approach to stabilising a road that results in higher stiffness, and reduced maintenance dust,” added Bright. “It stabilises and changes the properties of material to enable less effort and stronger, more workable soils that were previously considered unsuitable. “The surface of a PolyCom-treated area is comparable to one treated with lime or cement, but PolyCom is easier to apply and can be reworked at any time.”

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Work in progress after Polycom has been spread on a mine road.

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Goldfields Mining Expo

On your radar Mining companies can find out how radar technology allows the continued monitoring of mine wall movement.


oldfield miners are being encouraged to install radar for monitoring slope displacement in open pit mines. Equally applicable for gold and coal mines, IDS Australasia said its IBIS-FM slope monitoring radar was already an established service in the mining sector. The company is hoping its presence at GME will increase awareness of the radar technology with mine managers based in the goldfields. IBIS-FM monitors mine wall displacement 24 hours a day with sub-millimetric accuracy, at distances of up to 4km. It provides early warning for progressive slope displacement that could potentially lead to mine wall failure and it allows miners to map the long-term evolution of slow-moving slopes.

IDS Australasia said the radar provided a better knowledge of rock mass strength, while the large area monitored provided a broad picture of the pit walls. High spatial resolution and a fast scan time means expeditious alarms are generated, providing increased safety benefits for both mining personnel and equipment. And the radar also boasts a low false alarm rate. Fully self-powered, the radar operation uses a combination of solar panels and batteries, resorting to a diesel generator only as a backup. IDS Australasia chief executive officer Pieter van Jaarsveld said the IBIS-FM technology assisted with the risk assessment for worker safety and helped optimise mine operation productivity. “In particular, SAR has revolutionised the sampling process and has overcome

IDS Australasia will be promoting its IBIS-FM slope monitoring radar to mining companies at GME.

the limitations of traditional technology by providing higher spatial resolution, longer monitoring distances and faster sampling rates,” van Jaarsveld said. “Consequently, production delays due to slope instability were better managed by the availability of accurate data that the SAR system provided. “The small horn antennas are not affected by wind and produce a wide radar beam, illuminating the entire monitored area repeatedly during a single acquisition sequence lasting a few minutes. “The monitored scenario is sampled 400 times from slightly different angles in just a few minutes, drastically reducing traditional acquisition-sampling times. IDS Australasia has offices in Brisbane and Perth, with its head office in Italy.

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Goldfields Mining Expo

Safety controlled A welder designed for miners working in humid and confined spaces will make its debut at GME.


elders will be offered the chance of taking the heat out of working in humid and confined spaces at GME. Welding equipment importer Smenco is heading to the expo for the first time to display a manual metal arc welder which has been designed for safe welding in mines. The 4.7kg Fronius TP125VRD-10 MineSpec has 125amp output with a maximum effective supply current of 10amp and a welding current range of between 10-125amp. Smenco marketing and event manager Dave Smith said Smenco’s customers, including Rio Tinto, had requested additional protection for miners working in high humidity, confined spaces. “We made the work leads high-vis, we put a polycarbonate cover over the metallic part of the machine and the body of the machine and we complied to a standard which means the maximum draw from that machine will only be 10amp,” he said. “The braiding in the primary lead to the power source is also shielded. “We put in a few extra things that the mines requested. “It’s not standard. It was a request from mining clients so they can buy the safest possible machine. “At GME we will be promoting the machine to people within the area who perhaps haven’t had a chance to see it. “I would expect that a lot of people in mining, safety officers and mine managers

especially, would be interested in this. We would expect quite a good response.” Operator fatigue is also reduced, as there is no need to continually hold down buttons during welding, while the braided heavy-duty input power cable gives extra strength and protection. Generator compatible, the welder has a thermostatically controlled fan, an anti-stick electrode function and arc force dynamic functions. The welders are designed and made by Austrian company Fronius. The machines are then shipped to Smenco’s headquarters in Melbourne, Victoria, and altered to meet the specifications of the mining market. Smenco managing director Anthony England said the MMA voltage reduction device exceeded the latest Australian requirements for safe welding in mines. “To my knowledge, the TP125RD-10 was the only available VRD machine to meet the latest mine safety specifications,” he said. “We have worked hard to ensure our machines lead the field in aspects like ‘Fail to Safe’, 10amp maximum effective current supply, high-vis cables and braided cables.” England said Australian standards addressed the safety critical aspect of open circuit voltage by demanding a maximum of 35V OCV at the electrode when a MMA VRD machine was not welding. “And the software that controls the machine is designed to put the machine in fault mode if the VRD is not working,” he added.

The Fronius TP125VRD-10 Mine-Spec has safety benefits for welders working in mines.


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Mining Brief

The president’s man One of US President Barack Obama’s most senior economic officials has held finance meetings with Roy Hill Holdings. By Alison Middleton


ina Rinehart’s Roy Hill Holdings has held finance talks with the Export-Import Bank of the United States. Bank president Fred Hochberg, one of US President Barack Obama’s key economy officials, arrived in Perth, Western Australia, recently to discuss funding the Roy Hill iron ore mine in WA’s Pilbara region. Hochberg confirmed he had held “very productive” meetings with project officials during his first ever visit to Australia. The bank, which is the official export credit agency of the United States, intends to lend $US2 billion to other Australian projects by the end of the year. Speaking at the US consulate-general in Perth, Hochberg said: “We’ve had conversations here with Roy Hill. We had a very productive meeting with them. They’ve put together a very strong outline of what that project is.” Hochberg wouldn’t reveal details of the talks, but said the bank’s role was to assist US companies in selling and competing overseas, so the project would include US products or services.

“US Ex-Im is a potential source of funding for the Roy Hill project.” – Roy Hill Holdings “We want to make sure US companies have financing, so that’s not an impediment to closing the sale,” he added. “We deal with exports – not investment. Our job is to support the sale of exports. It could be engineering services, as well as Caterpillar equipment, for example.” Australia is one of the Export-Import Bank’s largest growing markets and topped the list for the bank’s financing in 2012, with authorisations totalling $3.1 billion. If the bank agrees to support the Roy Hill project it will be its second biggest project in Australia after a $2.9 billion loan to support US exports to the Australia Pacific LNG project in Queensland. Hochberg started the trip in Perth before continuing on to Brisbane, Queensland, and Sydney, New South Wales. He said the purpose of finance ranged from funding aircraft, NewSat satellites and the Australia Pacific LNG project, as well as coal and iron ore mines. “Australia has increasingly become a very large market for US exports, which is what brought us here today,” Hochberg said. “We’ve been active here for 60 years, but exports have increasingly sped up in the past year. “Just four years ago we did less than half a million dollars’ worth of loans to the Australian market to purchase US goods. This year we’ve already topped three billion, and we’ve got another two-plus billion in the pipeline. “Increasingly, as the world is expanding, there’s been a boom in extractive industries. “That’s a very strong market here in Australia, that’s what brought us here,” he added. The $A10 billion Roy Hill project is targeting first production by


Chairman and president of the Export-Import Bank of the United States Fred Hochberg.

2014, before ramping up to full capacity of 55 million tonnes per annum the following year. A spokesman for Roy Hill Holdings confirmed the company was “holding early discussions” with a number of potential financiers. “We would expect that the eventual funding package will be drawn from a range of Australian and international sources,” he said. “Roy Hill used the opportunity of Mr Hochberg’s visit to have another meeting with US Export-Import Bank,” he said. “There is already an amount of equipment being procured from the US and the mandate of US Ex-Im is to support the export of US manufactured goods. “Therefore, US Ex-Im is a potential source of funding for the Roy Hill project.”

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Driving Down Haulage Costs


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Softening the blow A software technology company says it has found the solution to reducing the strain on mining equipment. By Vetti Kakulas


s market demand for minerals increases, so too does the strain on mining equipment. Software developer Mintec has launched its updated MineSight Haulage software version 4 to the mining industry promising to help companies optimise projects and equipment. The US technology company is based in Arizona and has one Australian office, in Perth, Western Australia. Mintec’s updated modelling and mine planning software includes a more defined rimpull curve and an improved virtual inpit routing. Rimpull is the useable power at the point of contact between a truck’s tyre and the ground. “For the detail and peace of mind required for full feasibility studies of new and existing mines, Minesight Haulage is a key asset for engineers,” Mintec president John Davies said. “Minesight Haulage complements our flagship product suite, Minesight 3D and has grown into a proactive software package that can drive down haulage costs.” Mintec’s Minesight software addresses solutions for equipment cycle times, material

routing and detailing equipment needs, speed, capacity, efficiency and fuel burn rates. The Minesight 3D product has been developed for engineers designing roads in a haul network. “What makes it unique is its combined function of managing the haul network, the calculation of cycle times and the routing of material to physical destinations,” Mintec vice-president Glenn Wylde said. While the software’s nodes or bumps define different destinations, the polylines are used to map roads. “A combined node-polyline network allows routes to be connected between mine phases, as well as exposing other possible route solutions,” Davies said. For future references and comparisons, tracking the journey of trucks and shovels is an obvious solution in an economic sense. Mintec says the Minesight software can assist by offering complete management of a haul network in a 3D view. When used with the Minesight interactive planner, the haulage software allows the engineer to operate on mining cuts and to generate equipment requirements. The engineer can store a complete haulage

network within a database and determine the most efficient route for a truck from a mining cut to its destination. “The haulage software provides off-theshelf integration with the interactive planner and is an optional addition for sites requiring detailed tracking of equipment hours,” Wylde said. Mintec says the haulage software can also be integrated with its Minesight schedule optimiser, an open cut mining sequence tool. The schedule optimiser reads data from the interactive planner and transforms schedules into a 3D view. The data can be used in other Minesight planning and scheduling applications via common links to its database. Engineers can also create route profiles for drive diagrams and external processing. Other features of Mintec’s software include calculating detailed round-trip schedule times and estimating equipment requirements based on tonnage and net operating hours. It can generate route profiles and can control network flow using phase availability or one-way routes and it also offers multiple reporting options.

A screenshot of Mintec’s MineSight Haulage software version 4.


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No limits Mining engineer and dragline expert Graham Lumley speaks to Australia’s Mining Monthly about optimisation.


onsulting firm GBI Mining Intelligence is urging companies to improve equipment productivity as a way to reduce operating costs. GBI chief executive officer Graham Lumley said one of the biggest mistakes mining companies made was telling operators to limit payloads. Lumley argues that limiting payloads results in the operator underperforming on set targets. “Many mines operate equipment at levels far below capacity, some at 50 per cent or less,” he said. “This can cost millions of dollars each year. “With any piece of mining equipment, the one thing they need to focus on is optimising payload, within the constraints of the machine.” “The best thing you can tell an operator is fill the bucket up, fill the tray up, fill whatever you’re using. “And if it’s overloaded that’s not an operator problem, that’s a management problem.” Since 1992, GBI has collected more than 600 million cycles of data processes from draglines, trucks, electric rope shovels, front-end loaders, hydraulic excavators, backhoes and drills. “We collect the data as part of our ongoing work in benchmarking, analysis and various projects we’ve been involved in,” Lumley said. “The data is kept in a database in an unidentified manner, so that it creates a larger body which future benchmarks can be compared against.”


“Many mines operate equipment at levels far below capacity, some at 50 per cent or less. This can cost millions of dollars each year.” – GBI Mining Intelligence chief executive

officer Graham Lumley

GBI’s database has been collected from a range of open cut mining equipment, taken from 250 operations worldwide. “Mining companies use this data to help them reduce the risks associated with planning and projects, to refine targets and ensure efficiencies are achieved,” Lumley said. Brisbane-based GBI has previously worked at Xstrata Coal’s Newlands project, located in the northern part of Queensland’s Bowen Basin. It concluded Xstrata’s dragline was operating at 42% below best practice productivity by evaluating previous equipment data and onsite knowledge of the same make and model. Xstrata’s equipment operators were taught by GBI not to fill a dragline bucket but rather pick the bucket up early and swing hard. GBI said within a month the payload had increased by 30%, increasing productivity and saving the mine millions of dollars. “It’s really about what the dragline is capable of,” Lumley said. “The theoretical capacity of a dragline is probably 60 or 70 more per cent higher than even the best practice ones achieve. “We started looking at what the best people do, if we rank them by annual output per data rating capacity, the difference between the two


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Free Call  HARDOX is the opportunity for improvement.” Mining companies operating draglines can encounter a range of issues, including oil stability and bad blasting. GBI says its data can help mining companies purchase the right equipment for each different project. Lumley said the target for equipment output was often based on “wildly inaccurate forecasts”. “Current output is often a function of what has been done since the mine started but it might not be the best way,” he added. “GBI’s data provides a reality check on what the equipment actually does and how the best mines do what they do. “We can help to refine targets at a mining operation while ensuring revenues are met.” GBI’s database found there was a trend of declining availability with the increasing age of equipment. “Logically, the older the equipment is, the harder it is going to be to keep going. But with draglines that’s not the case,” Lumley said. “Traditionally, draglines have stopped for a long shutdown period every five years. “However, we have actually found when long shutdowns occur, draglines lose 1.2 per cent on average in availability which is not regained.” The 1.2% loss in dragline productivity is believed to be worth more than $500,000 per annum to a mine. “In between the long shutdowns, availability stays fairly constant so the longterm decline is actually a series of steps with consistent availability in between,” Lumley said. “At the moment, I’m telling companies not to do long shutdowns as it costs real money to the bottom line.”

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Optimising payloads can save mining companies millions of dollars each year.


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Auto pilot Can movie technology improve a minesite? 3D design and engineering company Autodesk has extended its services to the mining and resources industry.


ith a rapidly changing engineering and natural resources industry, mining companies must consider financial and environmental integration in order to remain productive. That is the view of software company Autodesk which recently promoted its Building Information Modelling to the Australian mining industry. Based in California, US and with an office in Sydney, New South Wales, Autodesk says the software can help reduce haulage costs. The firm is more renowned for its entertainment software. Autodesk products have previously been used by director and producer James Cameron for the 2009 movie Avatar. BIM is a technology developed as a “green and sustainable solution” for designing and planning a mine. It was only recently that Autodesk decided to directly market the software to the mining industry. “We are larger than other mining software companies,” Autodesk natural resources industry specialist Paul Donnelly said. “Some of the specialty mining software company products range anywhere from $20,000 to $75,000 for a single user model.” Autodesk’s Infrastructure Design Suite Premium 2013 software costs less than $10,000. The BIM software promises to deliver solutions from the planning phase of a mine to plant processing and all the infrastructure onsite, including transporting systems and port design. “BIM is really a process,” Autodesk industry strategy and business development director Richard Humphrey said, “It focuses on trying to make decisions early on with consistent coordination, all driven by a model-centric approach. “We start the process with developing model-based information.” By using BIM, mining companies can assess the opening or closing of a mine and view a digital model of its entire life cycle. “It is not just a 3D geometry model you are creating, it is an intelligent model that has all the information about a 3D object,” Humphrey said. The purpose of using BIM is to prevent


Rendering of a process plant model, created with Autodesk 3ds Max software.

mistakes eventuating in the field, which can drive up costs and slow down production. So it is critical to have coordination during the planning and processing of a minesite’s design. “We do a lot of simulation, visualisation and analysis of the coordinated design before you start doing anything on the site,” Humphrey said. “That results in a much more efficient design process with less error on the construction side.” The BIM is said to improve a mine’s

sustainability and energy efficiency, as it suggests where to place a minesite and transfer materials with minimal impact on the surrounding environment. “They can discover problems and model and simulate how that will perform in a real world before they build it,” Donnelly added. “The value in that is just tremendous.” Autodesk’s software has also been widely used in engineering and infrastructure projects.

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The game changer The federal government has rewarded a Queensland company for developing an innovative roller technology.


coal mine can lose up to $A1.4 million an hour in downtime whenever a conveyor belt has to stop to allow rollers to be replaced. In Australia there are more than 6.3 billion conveyor rolls. Do the maths. For each minesite, companies use about 25km of conveyor, with between 10-50% of these rollers needing replacement each year. Quite a sobering thought, especially for the men in suits who don’t like spending money. Which is why Queensland conveyor belt specialist Tamec Services has designed the OneFits Roll technology. Tamec says the OneFits Roll can significantly reduce operational and maintenance costs for conveyors. The federal government has even recognised this innovation, awarding Tamec


an early stage commercialisation grant. “Commercialisation Australia is helping our talented entrepreneurs and researchers, such as Tamec Services, convert their innovative research and intellectual property into successful marketable products,” Commercialisation Australia chief executive officer Doron Ben-Meir said. Commercialisation Australian is a federal government initiative. Tamec used the grant to further develop its OneFits Roll product, a conveyor roll technology. Compared to traditional conveyor rolls, the OneFits Roll is about half the weight and has double the load-bearing capacity. The rolls are currently being trialed in mines. Tamec director Colin Longton believes the rolls will have a huge impact on the conveyor sector.

Tamec’s OneFits Roll trial products.

“It’s a game changer in terms of the conveyor industry,” he said. “We’ve had rolls in mines for three years without a failure. We’ve had them in gold mines, a very acidic environment, for 18 months without failure.”

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Mining Brief

Kwadjet Koorl Mining contractor Abigroup has teamed up with a mentoring foundation, introducing an initiative to encourage indigenous Western Australians to join the mining and resources industry. By Vetti Kakulas


he David Wirrpanda Foundation has joined forces with Abigroup to develop a training and employment program for indigenous Australians. Wirrpanda, a former Australian rules footballer for the West Coast Eagles, founded the DWF seven years ago in Perth. Dubbed the Kwadjet Koorl project, meaning “go forward” in the Noongar language, the initiative also involves several other companies which will support the training and recruitment process. So far, the program has invited 20 trainees to work at Abigroup’s construction projects in the Pilbara. “The Kwadjet Koorl project is not just the right thing to do for the community, it also makes good business sense for Abigroup,” Abigroup WA general manager Maurice Dessauvagie said. “Abigroup has been through a period of rapid growth and the Kwadjet Koorl program will help ensure we have the right people with the training and skills required to sustain that growth. “Combining this business objective with

an opportunity to establish a clear, well supported career path for local, indigenous Australians will provide long-term social and economic benefits to Western Australia.” The Kwadjet Koorl course runs for 12 months and DWF will deliver four one-week workshops for the trainees. Abigroup will provide onsite training, supervision and potential employment opportunities for the trainees once they have finished training. The project roles will include plant operators and business administration personnel. Indigenous recruitment company Ochre Personnel has provided a four-week life skills training program to assist the trainees with the transition to a working environment. DWF will provide mentoring and life skills training during the duration of its four-week training program. “We will provide a lot of team building exercises and look at issues the trainees might have,” DWF chief executive officer Lisa Cunningham said. “Essentially, we’ll just be that third party mentor between Abigroup and the employee.”

Some of the workshops DWF will offer include cultural identity, financial literacy, as well as advice on health and fitness and nutrition. “Obviously, the trainees will be paid,” Cunningham said. “Coming from unemployment to working, the mentors will teach them how to manage money and learn the realities of [fly-in, flyout]. “Our different mentors have different skills sets to offer. “The most important stage is mentoring and building relationships, as retention issues are one of the biggest problems employers have.” DWF’s team includes Wirrpanda, Michelle McAullay and other former Australian rules footballers Troy Cook and Dale Kickett. “We would love to continue the co-alliance with Abigroup,” Cunningham added. “I wish all employers could look at this model. “Most companies have a lot of mentoring in place but that third party, external mentor makes a difference.”

Kwadjet Koorl trainees with Ochre Personnel chief executive officer Joanne Pellew-Hajinoor and Abigroup general superintendent Stan Hallstrom (front centre).

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Cranes & Lifting Equipment

Safe doze Time for some heavy lifting? Enerpac has just what you need. By Vetti Kakulas

The Enerpac DLS lift system.

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“Regardless of weight distribution, the system is designed to lift and lower a dozer synchronously between all lift points,” Hamdan said. “It will also fit beneath dozers with 90 per cent track wear, providing enough height clearance to perform track maintenance.” Lifting and lowering of the jacks can be paused at any time, locking the system safely until the user is ready to get back to work. Its jacks are bolted into a rolling cart, with fork pockets and retractable wheels, so the unit can be positioned anywhere the user wishes. The user can operate the lifting system with its hydraulic power unit and control, which is encased in its rolling cabinet. Enerpac’s control has a 25-foot pendant for operator mobility and safety during lifts. The controls, or programmable logic controllers, include software to monitor and control the four lifting points simultaneously. A “user-friendly” coloured touch screen is mounted inside the cabinet for the user to view informative data, such as lifting height and load. Enerpac says a single hydraulic unit has the capacity to operate six lifting units. In case of an emergency or malfunction, a built-in alarm system will stop the lift. Storage for cable reels and hoses is also included in the DLS lift system design.

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ifting specialist Enerpac has introduced its DLS series lift system to the mining industry. Based in Wisconsin, US, Enerpac has designed the DLS specifically for the Caterpillar D11 and D10 dozers. The system can be used by just one user for track and side frame maintenance and is suited to servicing and maintaining 100-tonne dozers. Enerpac says it can lift dozers quickly and safely, with a lifting speed of 46mm per minute. For safe load control, the DLS has a four-point custom synchronous lift system. The lift system has two separate lifting units which can be placed at opposite ends of a dozer. “With stroke-controlled movements providing precise positioning for a stable load, the dozer lift system offers a safe solution to lift dozers at remote maintenance and service locations,” Enerpac integrated solutions global marketing and innovation leader Al Hamdan said. Each unit has two hydraulically operated jacks with motorised locking rings.




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Hooked on safety A global crane company has recognised its Australia-New Zealand division’s impressive safety culture.


afety is important, in any industry, but especially in mining, where there is a lot of heavy lifting involved. Konecranes, one of the world’s largest crane services companies, has awarded its Australia-New Zealand branch its global safety award. With offices throughout Australia, Finnish firm Konecranes awarded the Australia-New Zealand branch for “outstanding performance” in operations across 47 countries. “Konecranes has a worldwide culture of safety, as a first priority for all our customers and our staff, so getting this award for the very first time against such competition is just fantastic,” Konecranes Australasian managing director Brad Hyem said. The firm’s national occupational health and safety team is led by Brad Leckie, who said he was committed to safety awareness and reducing accidents in manufacturing and maintenance operations. “Customers share our belief that there is no job so important or service so urgent that we cannot take the time to perform our work safely and correctly,” Leckie said. “While it’s less serious than personal injury to people, damage to our customers’ crane loads can be disruptive to their business. “Complementing our safety culture, Konecranes also provides a wide variety of smart technologies that allow for safer, more controlled movement of loads.” Konecranes has also introduced crane reliability surveys and thirdparty inspection services for the mining industry. The survey was developed to ensure users of all crane makes and models were fully compliant with Australian standards. Konecranes, which has been in business for more than 80 years, has a massive collection of cranes, more than 410,000, consisting of all makes and all are under service contracts worldwide. The Australia-New Zealand branch has more than 11,000 employees.

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Cranes & Lifting Equipment

Golden jubilee One of the world’s largest crane companies has reached a major milestone in Australia.


erman lifting specialist Demag Cranes has celebrated 50 years in Australia. With headquarters in Düsseldorf, Germany, Demag has manufactured cranes and hoists for almost two centuries. Its Australian offices were established in 1962 in Sydney and Melbourne. Demag has since expanded, with branches in Perth, Western Australia, Adelaide, South Australia, Brisbane and Mackay, Queensland, and Wollongong, New South Wales. To celebrate its 50th anniversary, Demag hosted a gala function at its production factory and Australian headquarters in Smithfield, Sydney, where 200 customers and suppliers attended.

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Guests included German consul-general Hans-Dieter Steinbach and German Australian Chamber of Commerce executive director Christian Wolf. Outgoing chief executive officer and managing director Ron Tennant said Demag’s history went back to 1819, when an iron foundry was established in a castle in the small German town of Wetter. “Soon after, the company made cranes and hoists to aid production and the area developed into the industrial heartland of Germany,” Tennant said. “Over the years, Demag went through various name changes, mergers and acquisitions and became a major supplier of plant and equipment to European industry. “We have supplied cranes and hoists to

Entertainers String Diva with Demag executives (from left) Lars Brzoska, Joerg Stojan and Ron Tennant at the gala function.

all industries, including food and beverage, agricultural, cement, aluminium, light and heavy manufacturing, aerospace, mining and tourism. “We have cranes of all types and sizes, from less than 1 tonne up to 200t.” Demag has supplied thousands of cranes to the mining industry, including wire rope hoists, chain hoists and motors. It has also provided servicing and maintenance. Tennant said Demag was still providing spare parts for hoists that were sold in the 1960s. “We are proud of the contribution we have made to the development of this country,” he said.


Cranes & Lifting Equipment

Like a rock Puncture resistant and self cleaning, Bearcat’s resilient Solideal SolidAir TLH tyre has reached Australia’s shores. By Marion Lopez


onsidered a longer-lasting alternative to foam-filled tyres, the Camoplast Solideal SolidAir TLH tyre aims to provide telehandler operators with confidence. Designed for shock absorption and lateral stability, the tyre’s fusion of three different compounds provides tyre resistance and ease of drive, according to Bearcat regional sales and technical manager Richard Blacker. “It’s a soft riding resilient tyre, so it can’t go flat,” he said. “It has triangular air holes called apertures in the sidewall of the tyre to give you a nice soft ride without punctures. “It’s made out of three different compounds – it has a hard tread compound to give you the long wear, the centre compound is softer

but has triangular holes in the sidewall to give you the cushioning and then it has a harder base to ride on the rim correctly.” Blacker said the tyre was rated at 25 kilometres per hour and could carry loads of up to 7 tonnes. Although it was mainly suited to telehandlers to be used off-road, he said it could be fitted on other vehicles, provided they didn’t operate at more than 25km/h. “You can operate it on all rugged sites, whether it’s in construction or mining, where you need a telehandler to move supplies or equipment from one site to another,” Blacker said. “However, I want to stress that it’s not a highway tyre and cannot operate over 25km/h.”

The SolidAir TLH is a directional treaded tyre and with its deep 30mm tread depth it automatically self cleans during operation. “If you’re working in mud, each revolution throws the muck that may get stuck in the tread back out,” he said. “When the tyre compresses, it releases any rocks that may get in there. “The aperture in the sidewall goes into the tyre by approximately 2 inches, so nothing can get caught. “If something does get caught, which should be very rare, it will get pushed back out at the next revolution.” Costing around $2000, each tyre must be mounted on a flat base rim and has to be hydraulically pressed onto the wheel – an easy

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With regular tyres such as these, this telehandler is under constant threat from punctures.

process that Blacker said shouldn’t take more than 30 minutes per tyre. However, each tyre needs to be fitted on a special wheel which, depending on the machine, can cost up to $1500. Given the cost comparison with regular tyres, Blacker said some customers would have to weigh up the cost benefit, depending on the location and frequency with which the telehandler would be used. “A lot of these telehandlers are used on

farms and they don’t get many punctures there, so this may not be a viable option,” he said. “But on construction sites, there’s metal and nails lying around and they often cause punctures.” Blacker added that it was something mining firms were looking to address, so they could achieve a trouble-free operation, reduce their downtime and keep their production up. “You can’t afford to have the equipment

lying unused, especially in remote locations where the equipment can sit over a number of days until somebody fixes or replaces the tyre,” he said. “It’s in these remote locations where they prefer to run a solid tyre – they know they won’t have any problems.” US construction and mining firm Kiewit is one of the first organisations to have purchased the SolidAir TLH tyre since its release in Australia.


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Cranes & Lifting Equipment Kiewit Australia equipment manager Greg Esminger said the company bought a set to fit a Caterpillar TH514 telehandler currently deployed on a minesite in the Pilbara and added that everything was “so far, so good”. “We tried these to get away from tyre maintenance costs,” he said. “The added weight of the tyres gives a little more stability and still maintains a softer ride as well.” Lifting everything from handrail, pallets, pipe and structural steel, Esminger said the tyres supported the machine all day long and were yet to require maintenance. “So far, we haven’t got any flat tyres,” he said. “We have approximately 500 hours on them so far and we hope to get 10,000 hours out of them.” Esminger concluded the tyres appeared to increase the telehandler’s productivity and especially stability and traction, while decreasing operational costs. The SolidAir TLH tyre comes in two different sizes – 1300x24 and 1400x24. The smaller one carries a maximum of 6.4t and has an average lifetime of 3000 hours. • This story first appeared in Cranes and Lifting magazine.

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Mining Brief

Busselton on trial A memorandum of understanding with the City of Busselton marks the first formal relationship between Rio Tinto and the local government of a fly-in, fly-out town. By Alison Middleton


io Tinto has signed its first regional FIFO town memorandum of understanding. Agreement was reached with the City of Busselton, located around 200km south of Perth in Western Australia. The three-year agreement aims to establish an engagement framework as increasing numbers of Busselton residents fly to work in one of Rio Tinto’s four Pilbara mines. Designated contact officers within each organisation will develop, implement and oversee strategies for ongoing engagement and address any identified issues. It follows the confirmation FIFO service provider Skywest will begin a three-month trial of regular passenger transport flights between Busselton and Perth. Rio Tinto Greater Hope Downs mining

operations general manager John Dumbill said he was extremely pleased to sign the MoU on behalf of Rio Tinto. “We have been flying out of Busselton since 2007 and these flights have grown to now transport our FIFO workforce to the four Pilbara mines of Brockman, West Angelas, Hope Downs and Yandicoogina,” he said. “This has injected over $100 million in wages and procurement into the South West region in 2011.” Rio Tinto has also entered a twelve-month funding agreement of $185,000 that will fund youth and FIFO support programs in the Busselton area. It includes $35,000 for counselling support at local schools, $80,000 for a youth leadership program, $35,000 to support the new community resource centre, $25,000

FIFO service provider Skywest has been granted approval to begin a trial of regular passenger transport flights between Busselton and Perth.

to develop a youth enterprise program and $10,000 for a FIFO symposium by the Busselton Family Centre. Rio Tinto has about 500 employees residing in the South West region of Western Australia.

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WA Minerals & Eastern Goldfields in Focus The first trainload of Karara’s iron ore is sent to Geraldton.

Maiden voyage A Perth-based iron ore producer has reached a major milestone with its first trainload of iron ore. By Vetti Kakulas


indalbie Metals has delivered its first trainload of ore to Geraldton from its Karara iron ore project in Western Australia’s Mid West

region. The Karara project is located 200km east of Geraldton and is a joint venture between Gindalbie and Chinese steel producer Ansteel. Gindalbie managing director Tim Netscher said the completion of the first train path from Karara was a significant landmark. “It’s not every day that Western Australia sees the completion and commissioning of such a significant piece of transportation infrastructure,” Netscher said. “Our new 85km long rail spur now links seamlessly with the existing Mid West rail network.” Gindalbie’s rail line runs from the rail loop at Karara, in the west, to Tilley Siding, where it connects with a 200km railway, owned by WA rail infrastructure operator Brookfield Rail. Brookfield is currently working on upgrading the existing line from Morawa,

67km west of Karara, to Geraldton. This would accommodate the Karara project’s stage one production target of a capacity for 10 million tonnes per annum. To fund the final construction phase of Karara, Gindalbie recently secured a $A239 million project debt facility, with funding by the China Development Bank. “I’m confident this signals a major milestone for Gindalbie, as we deliver our remaining project development targets and shortly commence commissioning activities at Karara,” Netscher said. Gindalbie said Brookfield Rail’s work was ahead of schedule to meet Karara’s ramp-up and is targeted to be completed by the end of 2012. A 15-year rail haulage agreement has been confirmed between QR National and Brookfield Rail. “This is an example of the positive flow-on effect resulting from the development of a major new integrated resources project such as Karara,” Netscher said. “Karara Mining has directly invested more than $1 billion in new infrastructure in the

Mid West, much of which is common-user infrastructure, which will help unlock the value of the region’s resources. “Combined with the investments of other third parties in upgrading and enhancing the existing rail network, the region stands to benefit enormously from the development and delivery of the Karara project.” Since Gindalbie’s port works are not yet completed, due to minor delays at the Karara Export Terminal, its ore will be stored in train cars at Narngulu, close to Geraldton. Once sufficient ore has been stored at the port’s facility, Gindalbie says the port will be ready for shipment. More than 2 million tonnes of hematite lump and fines ore had been stockpiled at the Karara site in preparation for dispatching. Karara’s stage two expansion to 16 million tonnes per annum is currently the subject of a feasibility study. A six-month ramp-up to the stage one capacity of 10Mtpa, including 8Mtpa of magnetite concentrate and 2Mtpa of direct shipping ore, is under way.

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WA Minerals & Eastern Goldfields in Focus

Kalgoorlie to Africa From modest beginnings in Kalgoorlie 25 years ago, Ausdrill has grown into a major international mining player. By Vetti Kakulas


ining services company Ausdrill has started work on its largest contract to date. The $525 million, five-year mining services contract is for Perth-based Resolute Mining at its Syama gold mine in southern Mali, 300km southeast of the capital Bamako. Ausdrill subsidiary African Mining Services will deliver the contract. “This is the single largest contract ever awarded to the Ausdrill group and clearly recognises our ability to tackle large scale mining service projects in west Africa,” Ausdrill managing director Ron Sayers said. The expansion will lift annual production at the Syama gold mine to about 270,000 ounces from 2014.


Ausdrill has operations in the Western Australian Goldfields, though recent years have brought expansions to other regions, predominantly in Africa. It is currently contracted at Fortescue Metals Group’s Cloud Break, Christmas Creek and Solomon project operations. Ausdrill’s growth is evident in its recent financial annual report. Passing the $1 billion revenue barrier, Ausdrill reported a 53% leap in after-tax profit for the 2012 financial year and a record net profit after tax of $A112.2 million. “Over the past 12 months we have grown by winning work from existing customers, expanding into new markets and building our relationships with the major operators in the mining and energy sectors,” Sayers said.

Ausdrill managing director and mining magnate Ron Sayers.

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Additionally, Ausdrill continues to expand and recently acquired rental earthmoving equipment company Best Tractor Parts, which is based in Perth. “We regard this as a very strategically important acquisition, as it provides a logical fit with Ausdrill Mining Services and other Ausdrill divisions,” Sayers said. “It will enable us to grow our hire fleet from 117 to 194 vehicles, enhance our maintenance capabilities and capture additional opportunities to build relationships with blue chip customers.” Best Tractor Parts was established more than 25 years ago and has branches in Mackay, Queensland, and Singleton, New South Wales. Ausdrill is also known for its community spirit, recently sponsoring the Australian women’s hockey team, the Hockeyroos, at the London Olympic Games. Ausdrill employs more than 5000 staff. In Australia, Ausdrill has a fleet of 64 earthmoving units and an ancillary equipment fleet of 40 units. The firm provides contract mining, grade control, drill and blast, exploration, mineral analysis and procurement and logistics services to the mining industry.

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Ausdrill has numerous operations in the Pilbara region.


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WA Minerals & Eastern Goldfields in Focus

Panoramic view Panoramic Resources has had a tough financial year. But the company believes it can bounce back with major expansion programs in Western Australia. By Vetti Kakulas


012 was a tough year for nickel producer Panoramic Resources. The firm, based in Perth, Western Australia, recorded a net loss after tax of $A18.2 million for the 2012 financial year. Panoramic said the loss was caused by a combination of a lower nickel price, a high Australian dollar, higher production costs and increased corporate acquisition costs. But on a positive note, the cash and receivables position was strong, at $79 million, and total assets were up 6% to $431.3 million. Despite the challenges of 2012, Panoramic remains optimistic. The company plans to expand its gold and platinum group metals (PGM) business within the next two to four years. “75% of the world’s platinum comes out of South Africa, and they’ve had some issues,” said Panoramic managing director and founder Peter Harold. “Our view is that production from there is probably not going to grow quickly and may, in fact, come off a bit.” South Africa is suffering rising mining cost pressures, with mines getting deeper, falling grades, increased industrial action, higher power costs and skills shortages all affecting production. There has also been a decline in PGM discoveries. “There is also a burgeoning middle class around the world that wants to drive motor cars, and in this day and age you can’t have automotive emission control without platinum and palladium,” Harold said. “So we see, not today, but somewhere in the next three to five years, a strengthening platinum-palladium cycle off the back of that increased demand in motor cars.” For the 2012 financial year, Panoramic announced a group production record of 19,791 tonnes of nickel, which exceeded its previous expectation of 19,400-19,600t. “We’re continuing to explore aggressively on more gold, more PGMs and more nickel,” Harold said. “We’re currently a 20,000 per tonne a year nickel producer. Our target is to ramp that up to about 25,000 tonnes, while also keeping our costs under control.” Panoramic’s most recent acquisition was the high-grade Wilsons gold project, located

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Panoramic Resources hopes to ramp up its nickel production from 20,000 to 25,000 tonnes a year.

14km from its Gidgee gold project, near Wiluna, Western Australia. The Gidgee project was acquired in February 2011 for $15.5 million and is located within 14km of Wilsons. Both Gidgee and Mt Henry have combined resources of more than 2 million ounces of gold. Additionally, Panoramic has a 70% interest in the Mt Henry gold project, which is operated by Perth-based exploration company Matsa Resources. Harold believes the purchase of the Wilsons project places Panoramic one step closer to gold production at Gidgee. “We’re trying to develop Gidjee, we have just done the concepts, so we’re keen to get that up and operating in the next two years. The next focus would be the Mt Henry gold project.” Panoramic has built a gold resource at Gidgee totalling 1.05Moz, which will be able to support a production profile targeting

75,000-100,000 ounces per annum. Another one of Panoramic’s acquisitions is exploration company Magma Metals, which has tenements in WA and Canada. Magma’s flagship PGM project is in Thunder Bay, 50km northeast of Ontario, Canada. To further build its PGM resource base, Panoramic acquired the Panton PGM project for $5.3 million, with rights to use its metallurgical process, known as the Panton process. The Panton project is in northern Western Australia. Panoramic purchased Panton from Platinum Australia for $5.25 million. Panoramic also has a small exploration focus in Scandinavia, which is a joint venture with Draig Resources, searching for copper, lead and zinc ore bodies. • A version of this story first appeared on


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WA Minerals & Eastern Goldfields in Focus

Golden invitation One of Australia’s oldest railways is undergoing a major revamp in a bid to lure tourists to the country’s largest open pit gold mine.

Workers rebuilding the stone walls of the central platform.


roject management and engineering company Engenium has started work on a project aimed at attracting visitors to one of Australia’s largest mines. Engenium is extending a historic railway line in KalgoorlieBoulder in Western Australia. The extension project is aimed at attracting more tourists to the Super Pit, Australia’s largest open pit gold mine, operated by Kalgoorlie Consolidated Gold Mines. Based in Perth, WA, Engenium will design the layout plans, profile drawings and engineering specifications for extending the railway line to the Super Pit Lookout. The railway line will run from a disused railway line at Boulder city station, which is part of the Golden Mile Loopline railway. Golden Mile Loopline Railway Society manager Mike Lucas said the concept of the loopline was to link all the main tourist attractions in the city, such as the Super Pit Lookout, the WA Museum, Mt Charlotte Lookout, Kalgoorlie Railway Station and the Hannan’s North Tourist Mine.

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“It is envisaged that by 2023 we will be carrying approximately 70,000 visitors a year,” – Mike Lucas “This will be achieved in four stages, the first being the Super Pit Lookout,” Lucas said. “It is envisaged that by 2023 we will be carrying approximately 70,000 visitors a year. “These will include local members of the community, tourists and executives visiting the city.” Engenium said the earthworks and track laying will be completed by February next year. Once completed, the 4km Super Pit Loopline will be used to take visitors to the lookout six times a day.

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CONTRACT MINING AUSTRALIA 4 - 6 December 2012, Hilton Hotel, Brisbane

Mitigating risks and enhancing partnerships for optimal project outcomes

Graham Parminter, Engineering Manager, DOWNER EDI MINING

Grant Deverell, General Manager Commercial, EVOLUTION MINING

Dominic Rodwell, Special Contracts Manager – Australasia, GOLD FIELDS AUSTRALIA

Tom Heggie, Commercial Manager - Mining Division, LEIGHTON CONTRACTORS

Mark Vale, Senior Counsel - Operations, PEABODY ENERGY AUSTRALIA

Paula McPherson, Commercial Manager - Wilpinjong Coal, PEABODY ENERGY AUSTRALIA

Cameron Plum, Commercial Manager, STANWELL CORPORATION

Ken McKenzie, General Manager Forrestania Nickel Operations, WESTERN AREAS


o irculate t

Please C

Jim Holding, Partner, DLA PIPER

Jason Ryan, Alt Mine Manager, Surface Metalliferous, HWE MINING

Ian Harrington, Principal, FLAGSTAFF CONSULTING

Belinda Menzies, Underground Contracts and Procurement Advisor, OZ MINERALS

Hamish Macpherson, Partner, FREEHILLS


Jay Leary, Partner, FREEHILLS

Tivolee Spragg, Senior Category Specialist, STANWELL CORPORATION

managers General anagers Supply m gers ns mana Operatio managers Contracts anagers Project m

Conference highlights Improving scope of contract at the tender stage for effective risk profiling


Evaluating alternative contract styles by aligning risk profile to level of desired owner control


Assessing qualitative factors for partner selection, including culture towards safety and personnel



Structuring rates in a fixed and variable model


Ensuring clear performance rewards and project accountability


Exploring feasibility of modern-day alliance models

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Avoiding legal loopholes in contract mining agreements Minimising site cost overruns and production delays by enhancing transparency and reporting Managing changes in scope of work Driving safety standards at a contractor-operated mine Improving contractor-client relationship at an operational level for better performance management Exploring common causes of disputes and understanding the dispute resolution process

Pre-conference Workshops: Tuesday 4 December 2012 A B

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WA Minerals & Eastern Goldfields in Focus Engenium and KCGM are also working with Brookfield Rail to complete the project. “With a long history in the rail engineering business, we are proud to lend our services to this project,” Engenium managing director Wayne Peel said. “The Super Pit is a must-see tourist attraction and an extended railway line up to the lookout will increase its visitor numbers considerably.” The Super Pit is 3.6km long, 1.5km wide and 600m deep. It produces more than 800,000 ounces of gold a year. “Kalgoorlie is renowned for its ‘gold rush’ era, so we are delighted to provide our support in phase one of bringing the Golden Mile Loopline railway back to life,” Peel said. Brookfield has donated secondhand track sleepers and turnouts to the project. KCGM will carry out the earthworks for the ramp travelling to the top of the lookout. Built in the late 1800s, the Golden Mile Loopline used to be one of the busiest railway lines in Australia, carrying freight and transporting workers to the mines. At its peak, more than 100 trains were running each day. It wasn’t until the first tram service was introduced that the Loopline became inactive.

Taken in the early 1900s, the Golden Mile Loopline railway.

The Golden Mile Loopline railway station.

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08/08/2012 16:11

Mining Brief

‘Supersite’ Western Australian Premier Colin Barnett has officially opened a Perth “supersite”, which promises to support the state’s mining and resources industry. By Vetti Kakulas


pecialised mining logistics company Linfox has opened a $70 million “supersite” in Perth, Western Australia. The warehouse in Hazelmere was officially opened by state Premier Colin Barnett. “This is an extraordinary facility,” Barnett said. “It’s a demonstration of great confidence in the resources sector and the growth of Western Australia. “There is no facility in Australia, perhaps even very few in the world, of this standard. “In terms of safety, the amount of merchandise and equipment they can handle, technology, and high environmental standards, this is world leading.” Based in Essendon Fields, north of Melbourne, Victoria, Linfox has depots

located throughout Australia. The Hazelmere supersite is the second Linfox facility in Perth, with the other in Canning Vale. Linfox’s warehouse receives and manages mining equipment and goods for customers including BHP Billiton Iron Ore and Fortescue Metals Group. “The Hazelmere site has a lot of safety requirements built into it, a lot of specialised handling equipment, particularly tie handlers, as well as generators and engines,” Linfox chief executive officer Michael Byrne said. “The site was built to be self-contained and has its own weighbridges onsite, truck washing and fuelling zone.” Linfox specifically built the floor with high point loading to allow for easier access to its road trains.

Linfox’s new “supersite” in Hazelmere, Perth.

Spread across 8.5 hectares, the new logistics hub includes a $A3.5 million master control room, where staff can monitor mining operations in real-time, 24 hours a day, seven days a week. “It is the most expensive room we have ever built anywhere in the world,” Byrne said. “It will not only track every truck, but also every trailer, dolly, piece of equipment and person.” All of Linfox’s equipment has global positioning system transponders on them to allow tracking of every trailer. The Hazelmere site currently has 150 employees as well as about 150 truck drivers.

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Fuels & Lubricants


Fuels & Lubricants

Fuel for thought Mining companies are increasingly avoiding capital expenditure by turning to fuel tank hire to manage downtime and productivity. By Alison Middleton


ustralia’s largest fuel tank hire fleet has found an “unique” niche in the marketplace as mining companies strive to lower costs and boost productivity. Fuel management company Fuel Fix has extended its fleet to almost 300 fuel tanks and expects to double that number in the next financial year. A reduction in initial capital outlay for major infrastructure projects is driving interest from mining companies, as managers work to avoid costly installation and maintenance delays at remote mine sites. Individual tanks start at about 1000 litres and go up to 110,000l, but the company can install systems to handle 1,000,000l of fuel for clients. And the entire fleet is self-bunded to


prevent leakage and contamination. With teams across Australia, the company is able to respond to customer requests for urgent fuel capacity increases and most tanks can be delivered overnight. Fuel Fix sales manager Jim Heit said the hire business was one of the company’s innovations. “The tank hire business is unique to the marketplace,” he said. “It’s a true hire product for fuel tanks for long or short-term, for the mining and civil industries. “With the tank hire business we had 15 tanks in 2009. We’re now approaching 300 units in our fleet and we’re looking to double that in the next 12 months. It’s quite amazing. “We can hire, install, maintain, repair

and manage tanks for clients. We provide everything bar the fuel. “We can do everything from ordering the fuel and maintaining the facility, through to refuelling the trucks. “A lot of clients are coming to us for the first time and the demand is increasing day by day. “Business is very good. I started with the company in November 2009 and we had 14 staff in the business. Now we employ 130. “With regards to growth, we’ve pretty much doubled our targets every year since I’ve been with the company.” The company’s services for remote mine sites include fuel management facilities, tank installation, fuel lines and pipes, metering equipment and tank gauging. Project management, repairs and

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Fuels & Lubricants

A fuel and lubricant farm installed at Moolarben Coal in the Western Coalfields of New South Wales. 1300 449 322 146

preventative maintenance, and calibration of equipment are also popular with the firm’s mining and civil industry customers. Fortescue Metals Group hired the company to increase fuel storage capacity to the power station at its Christmas Creek mine site in the Pilbara. An increase in power demand had seen expansion of the power generators, resulting in a rise in fuel consumption. But there was also concern of supply interruptions during the wet season. Fuel Fix installed two additional 110,000l storage tanks and associated infrastructure, including pipework and transfer pumps. As the average mine spends about $300,000 per quarter on lost fuel onsite, Fuel Fix said it was also able to record fuel usage in independent vehicles and equipment, assisting companies with increasing obligations and accountability due to the introduction of the carbon tax. The firm has also been receiving particular demand for tank hire from coal miners who are upgrading their infrastructure. Heit said: “A lot of mines don’t have the capital available to invest in infrastructure long-term. So the hire solution allows our clients to have the advantage of additional storage solutions without having to outlay capital.


Fuel Fix installed a diesel tank for Townsville City Council in Queensland.

“It’s a flexible service, so if they have a ramp up to increase production now, and it dies off, they can hand the tank back and they’re not tied to that capital moving forward,” he said. “The demand is increasing day by day, mainly from majors in the coal industry. “We are seeing a lot of demand from western Queensland in the hard rock and metals sectors.

“We’re now approaching 300 units in our fleet and we’re looking to double that in the next 12 months.” – Jim Heit “A lot of civil work associated with infrastructure is going into new areas. And we’re also experiencing growth in New South Wales.” Based in Perth, Western Australia, the company has offices in Brisbane, Newcastle and Townsville. “We just keep building the business,” Heit added. “Keeping up with demand is probably the big thing. “We have skilled staff members and we

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Transport company Hi-Trans Express had a diesel tank installed at its Brisbane facility.

build very good quality products that are made in Australia. “We have a factory in Brisbane that builds our tanks and also one in Melbourne and Perth. We are backed up by local support. “A lot of clients require that sort of support

and they really do appreciate it. “Fuel is something that a lot of businesses don’t think about until they really need it right there and then and we are there to provide our clients with solutions.”


Fuels & Lubricants

Cool, calm and collected An engine coolant analysis and management system could save mining companies millions of dollars in lost production and equipment repair costs.


ining companies are being urged to better manage the coolants used in machinery and vehicles – and avoid blowing budgets on unscheduled repairs. Total Coolant Management Solutions, which is based in Perth, Western Australia, has operated a core business of coolant analysis and manufacture for seven years. The firm is now expanding, with the launch of a service to help mining companies manage their use of coolants in equipment, ranging from road transport trucks to excavators, power stations and engines.

TCMS said its CPR Analysis is an online service that gives a “bird’s eye view” of coolant reporting and management systems through a new software platform. CPR is both a reporting and sample management program which automatically schedules site sampling, pre-prints asset information on sampling bottles and tracks samples. It can sample on an hours/km basis or on a time interval basis in batches to provide better analysis of overall performance on a site-by-site basis. CPR managing director Cliff Benns said

the company saw a need to deliver a system which better steered the coolant sampling and analysis process, provided greater visibility and promoted accountability. “Coolant-related problems are now estimated to be attributable to 40-60% of unscheduled downtime, costing companies millions of dollars in lost production and equipment repair costs,” he said. “Regular coolant testing can identify potential issues with a piece of equipment long before it becomes an expensive legacy. “For us, it was also about empowering our clients to help improve their coolant practices

A mining contractor’s samples of coolants on a mine site.


OCTOBER 2012 amm

through better education and understanding of engine coolant technology, and overcoming the perception that it was some type of weird science. “Coolant analysis can identify under or overdosing, corrosion issues, contamination, wear metals, seal and hose degradation, empowering management to take preemptive action and preventing costly damage to engine components.

“Coolant-related problems are now estimated to be attributable to 40-60% of unscheduled downtime.” – Cliff Benns “A regular coolant sampling and analysis program can end up saving a customer hundreds of thousands to millions of dollars each year.” The system features a high level customer dashboard arrangement which allows for an “at a glance” summary of the site sampling results. Users can drill down to view the detail on any given sample. And senior managers can see results across

A report summary of coolant management through Total Coolant’s online service.

multiple sites, allowing them to compare the performance of individual sites. Benns said customers were often shocked when they received their first lot of sampling results back and it was not uncommon for a large portion of the entire fleet to be flagged for action. “The initial coolant analysis results are

usually not great, but from thereon we usually see a marked improvement with each subsequent analysis,” he added. “We’re not here to tell you you’re doing a bad job; we’re here to help you do a better job and we do that through training, education and client contact programs.”

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ASX Update


Magnolia Resources Limited

Proposed code: MGB Principal activities: Exploration of mineral deposits. Issue price: 20c Corporate: Tony King (executive chairman); Cameron Pearce (non‐executive director); Travis Schwertfeger (non‐executive director). 08 9212 0105


Kin Mining NL

Proposed code: KIN Principal activities: Mining exploration and development. Issue price: 20c Corporate: Terry Grammer (chairman); Trevor Dixon (executive director); Fritz Fitton (non-executive director); Joe Graziano (non-executive director). 08 9242 2227


Asaplus Resources Limited

Proposed code: AJY Principal activities: Exploration of iron ore. Issue price: 20c Corporate: Ir Che Mohammed Hussein (non-executive chairman); Andy Lau (executive director); Dominic Lim (independent, nonexecutive director). 08 9211 6653

TO BE ADVISED Alicanto Minerals Aperio Resources Boadicea Resources Limited Crest Minerals Limited Gossan Hill Gold Limited Messina Resources Limited Paradise Phosphate Limited Red Cat Minerals Limited Swift Resources Limited Vesuvius Minerals Limited Victory Mines Limited

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Mining Software

Next generation A technology giant has released its latest computing platform, promising to help make mining smarter. By Vetti Kakulas


ining technology is constantly changing and improving. It’s vitally important that mining companies are continually kept up to date with the latest software and technology products. US company GE Intelligent Platforms has released to the mining industry a control and computing platform, designed specifically for the industrial internet. An industrial internet is described by GE as the imminent phase of internet technology, powering and connecting machines for different industries. This next phase will result in “smarter technologies” to help optimise mining operations and production, with greater uptime and low total cost of ownership.

The latest GE product, the Programmable Automation Controller systems RXi, is a technology supported by a network of cloudbased support tools. Cloud computing is a term describing the use of hardware and software over a network or the internet. “The RXi supports several trends in the industry including control sustainability, standards-based open architectures, computing and control at the machine level and integration into the industrial internet,” GE Intelligent Platforms product general manager Steve Pavlosky said. “Customers expect their manufacturing assets to outlast the control system. “This new way of developing a control platform allows them to maintain their

The high road to top news stories

investment, while taking advantage of the newest technologies to make their assets more productive, reliable and cost efficient.” GE says the small and fan-less RXi bridges the gap, integrating the control system with the industrial internet. “The RXi controller is the next evolution of programmable automation controllers,” Pavlosky said. “RXi delivers high performance control solutions, which can be developed, deployed and maintained with our new collaborative, cloud-based automation platform.” RXi is designed for harsh environments and can be used as a rugged industrial PC platform for factory floor computing. An integrated display module allows the user to operate standard maintenance

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functions, without the need for separate computer programming software. Pavlosky said the RXi could help customers gain productivity benefits from machine-tomachine connections and the skill sets of a digital native workforce.

“From a design perspective, the RXi controller is a departure from traditional systems.” – GE Intelligent Platforms product general manager Steve Pavlosky

It offers full high speed interfaces, with multiple gigabit ethernet and USB 3.0 ports. These features are coupled with GE’s PACSystems control engine. The family of RXi controllers have built-in redundant Profinet interfaces, which are said to deliver high performance and high uptime control solutions. Its industrial PC configurations are compatible with human-machine interfaces, Historian and analytics applications. “From a design perspective, the RXi controller is a departure from traditional systems,” Pavlosky said. “First, it has no local input-output, which creates the basis for future upgradeability. “Second, it has built-in Profinet, with ring redundancy to provide a simple to use, low installation cost, high performance redundant input-output network.” The RXI is distributed in Australia by Perthbased Motherwell Automation. Motherwell distributes industrial automation, control and information technology products to the mining industry. It also provides training and support on programmable logic controllers, supervisory control and data acquisition systems and telemetry and industrial communications networking.

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GE Intelligent Platform’s rugged RXi controller.

Perth gets technical US software manufacturer Epicor has opened its first Western Australian office in Perth. Based in California, Epicor’s Australian head office is in Sydney, with other offices in Adelaide, Brisbane and Melbourne. Epicor Asia-Pacific senior vice president and general manager Craig Charlton said the expansion was required due to increasing demand from companies servicing the mining industry. “Just as we saw a need to expand our own operations, our next-generation enterprise resource planning software is well placed to provide support to other expanding businesses requiring support,” Charlton said. ERP software offers solutions for project management, mobile field service management, maintenance and financial management, customer relationship management and supply chain management. It is available to users onsite, hosted or in the cloud. “Our ERP solution is built on a serviceoriented architecture and provides businesses with the scalability, flexibility and agility to manage the challenges faced in growth industries like the mining industry,” Charlton said. One of Epicor’s Perth-based customers, EL ES DE Engineering, is pleased with the new office. “Having Epicor represented in the region will be beneficial for our company

Epicor Asia-Pacific senior vice president and general manager Craig Charlton.

and other Perth-based Epicor customers,” EL ES DE general manager Rob McMahon said. The opening of the Perth office coincides with the recent acquisition of Epicor’s New Zealand partner, Cogita. For the past four years, Cogita has won Epicor’s global partner of the year award, as the top revenue producer worldwide. Epicor was founded in 1984 as Platinum Software and changed its name to Epicor in 1999.


market watch Worth the risk

Finland has been rated the world’s safest location for resources investment. By Anthony Barich


inland, renowned for its unique “Midnight Sun”, has proven the sun truly never sets there as far as investment goes, with the Scandinavian country topping RESOURCESTOCKS magazine’s World Risk Survey for the second consecutive year – and its third win in five years. Having topped the WRS in 2008 and 2011, Finland has again been named the safest place in the world for resources investment for mining and petroleum professionals, with the survey expanded to include suppliers and service providers to the resources sector. After winning in 2008, Finland suffered

a fall from grace, dropping to 10th in 2009, the year its economy recorded one of the steepest falls in GDP in the Euro area in the throes of the global financial crisis. The United States and Canada won the intervening years before the Nordic country again won the gong in 2011. The WRS asked respondents to rank their perception of financial, social and sovereign risks, land access, green and red tape, land claims, infrastructure, civil unrest, natural disasters and labour relations. Finland’s best scores were in the natural disasters, civil unrest, social risk and sovereign risk categories, but suffered when

it came to green and red tape – though these two scores were still comparatively lower than most other countries. Respondents were asked to rank each category out of three – 0 being the best and 3 being the worst – and the total scores were weighted in relative importance, with an overall potential score of between 0 and 34. London-based Michael Denison, global risks analysis research director at global political, security and integrity risk assessment consultancy Control Risks, said that despite its top ranking, Finland’s deterioration in performance was broadly distributed across the political and social categories, partially attributable to the more precarious economic position Finland finds itself in this year. He said: “While the Eurozone crisis weighs on economic prospects for the small, exportdependent country, it is also stirring political pressures.” A version of this story first appeared in RESOURCESTOCKS magazine.

Not what it seems The “Arab Spring” that bled into Africa and arguably changed the face of North Africa has dented the continent’s investor risk profile, but not all is as it seems. Burkina Faso suffered the biggest hit in this year’s World Risk Survey, falling from third last year to 33rd this year. West Africa veteran Mark Connelly, Endeavour Mining’s chief operating officer, believes this was mainly due to a 40 per cent hike in fuel tax. Connelly, who has spent much of the past 20 years in Ghana, Burkina Faso, Mali, Liberia and the Ivory Coast, said Africa was unique in that with its impressive geology, cheap labour and production costs and supportive governments there was substantial opportunity to add to mine life.


OCTOBER 2012 amm


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What’s New

Laser guidance Upgraded lasers improve tunnel alignment. By Alison Middleton


iners are being urged to follow batteries to LR44 cell batteries, depending on the line of sight to an improved operating times and size requirements. range of tunnelling lasers for MCE Lasers sales manager Daniel underground mining. Ramondetta said the mining industry could MCE Lasers has launched two upgraded be confident that not only did the complete lasers designed to deliver accurate construction range meet expectations but it exceeded and alignment of tunnels. them. The Melbourne-based firm, which boasts clients such as Rio Tinto, Newcrest, Xstrata “We continually redesign Coal and BHP Billiton, has unveiled its it to give optimal LD.60X25 adjustable laser beam instrument for long distances and the recently certified performance.” “intrinsically safe” LD60.IS laser for – MCE Lasers sales manager explosive areas. Daniel Ramondetta MCE said its full range was made from materials such as stainless steel, anodised aluminium, brass and incorporated diode “We have an adjustable, focusable laser – technology. the LD.60X25. It’s been redesigned for longEach of the lasers can be powered by range tunnelling – typically 800m to 1000m,” G M E 1of2 A d 1 9 supplies, A M M . pfrom d f D Pcell a g e he 1said.3 0 / 0 8 / 1 2 , 2 : 4 7 PM a variety battery

“It’s been in use for 20 years but we continually redesign it to give optimal performance. “Now we have made some modifications to go beyond where we’ve ever gone before, which is typically 800m to 1000m. We’ve made optic modifications using new laser diode technology.” The company is now on the lookout for international product distributors. “Usually, the lasers are used for underground mining and tunnelling. Either they are put into the rock face or they are hung from a drawbolt that is shone into the tunnel,” Ramondetta said. “The laser gives a virtual line that the machine follows, so during tunnelling it’s going in a straight direction.” The company is also experiencing demand for its LD60.IS laser, which can be used in

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MCE Lasers’ 60 series is designed for underground mining.

explosive areas and was designed particularly for use in coal mines. It allows tunnels to be constructed by tunnel boring machine, drill and blast, pipe jack or conventional hand techniques. And it doesn’t require an explosionproof containment when working in

gaseous environments, such as methane and air mixture, making it well-suited to underground conditions. “We have been dealing with these companies for the past 30 years, companies such as Rio Tinto, Newcrest, Xstrata and BHP and we also give them tailored solutions,” Ramondetta said.

“We’re not just offering off-the-shelf products. “For example, Xstrata is drilling a 1.4km vertical hole into the earth, so we tailored solution products for them, so they can drill quicker.”

Breaking the rules A “quantum leap” has been made in the design of a new feeder breaker, according to a Hunter Valley-based underground mining equipment manufacturer. Kopex Waratah said an “alternative” design philosophy had created a machine with enhanced strength and flexibility that broke long-held design rules. The first machine was sold to a miner in the Hunter Valley and a second is on the production line. Kopex Waratah engineering and operations director David Edwards said the feeder breaker represented a big step forward in mining machinery design and delivered tangible benefits in terms of production and maintenance. “A willingness to investigate alternative design and construction techniques, supported by strong management encouragement, has meant a quantum leap in mining equipment design,” Edwards said. “This feeder breaker is unique. It not only represents a design breakthrough – which has delivered benefits such as modular construction and underground reconfiguration – but it heralds a new ‘design and build’ era for the company in Australia. “The premise behind the project was to

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Kopex Waratah has designed a new breed of feeder breaker.

look at the design and engineering of feeder breakers from a different perspective. “Feedback from our customers had given us some pointers as to where we could improve the productivity of feeder breakers and we had our own ideas of where we could advance equipment design and operation.” The machine has an operating weight of a little more than 32 tonnes and boasts a three-way access hopper assembly which can be adapted depending on the material being mined and reconfigured underground to reduce breaks in production. It also has significant improvements in

tailshaft design and accessibility. If required, the tailshaft can be removed through the back of the machine, eliminating the need to remove side plates for access. A new track configuration has been developed which is height-adjustable via hydraulic cylinders to provide improved alignment and stability. Maximum operational output in continuous operation is 216 cubic metres per hour and the economic life of the machine is 5.18 million runs, allowing for four major overhauls. The machine’s hopper capacity is up to 16,000kg and machine capacity is rated at 20,000kg.


What’s New

Hard case US-based rock drilling tool manufacturer Rockmore International has announced a new drill bit design especially suited for hard rock quarry drilling. Rockmore said its CrossFlow bit design extended bit life and improved penetration rates for percussive drilling applications in abrasive and challenging rock conditions. It incorporates new design features in the bit face, particularly in the geometry and placement of flush holes, flush grooves and tungsten buttons. The bit has flush holes in wider V-shaped flushing grooves to promote maximum flow of broken rock cuttings away from the bit face. Rock chip velocity is also reduced at the wider section of the flush groove at the bit edge, leading to a reduction of steel erosion on the body of the bit. The company said tungsten buttons had been strategically placed around and between the flushing holes and grooves so carbide buttons contacted the rock more effectively with each impact between the bit and the rock face. Placement of carbide buttons on the CrossFlow bit design maximised the effectiveness of the carbides to penetrate and break the rock and resulted in improved penetration rates, Rockmore said. Rockmore International has unveiled the CrossFlow bit.

Bright light in mining SuperLED Electronics says it is experiencing increasing demand for its miners’ cap lamps from Australian underground miners. The Chinese manufacturer is promoting its range of light emitting diode cap lamps to the resources market. Lightweight and waterproof, the lamps have a colour temperature of less than 6000 kelvin to protect workers’ eyes. The lighting intensity of the LEDs ranges from 2000 to 10,000 lux, depending on the demands of the working environment. When the power of the main LED diminishes, the auxiliary LEDs turn on automatically. A company spokesperson said: “Our lamps can be used in different types of underground mines. “Lots of Australian mines are using SuperLED miners’ cap lamps.


SuperLED miners’ cap lamps.

“The basic principle is to supply the LED light sources with Li-ion batteries inside the pack. “SuperLED miners’ cap lamps aim to revolutionise worker safety and body-load in the underground mining industry.”

Know who’s boss THE Aussie QP40T Mine Boss 4-inch trash pump has been launched onto the Australian market to help miners face the challenges of moving contaminated rain and groundwater. Designed with national mine specifications for mobile and transportable equipment in mind, Sydney-based Aussie Pumps said its product was powered by Yanmar engines and set standards in mine specs for pump equipment. “The beefed up frame and safety features have made these pumps favourites with our industrial pump dealers,” Aussie Pumps product manager Brad Farrugia said. “More mines and even construction companies insist on Aussie Mine Boss pumps for solids handling applications. Our production team are only just keeping up with the demand.” The pumps can handle a high percentage of solids in suspension, with a “non-clog” style impeller made from high SG grade cast iron. Other features include a front clean-out port, emergency stop, battery isolator, frame mounted fire extinguisher and optional bunding tray.

OCTOBER 2012 amm

Companies & organisations in this issue Beating the drum A wastewater solutions company has launched a rotary drum screen to boost efficiency when screening mining wastewater. The CST Wastewater Solutions drum screen enhances durability, hygiene and serviceability for miners. Fully enclosed for occupational health and safety and aerosol control, the screen is corrosion-resistant, self-cleaning and has non-lubricated chains and non-metallic drive sprockets. No mechanical parts come in contact with screened solids and the internally fed rotary drum screen can use wedgewire or perforated hole drums. Wastewater passes into the internal feed tank before overflowing onto the screen face of the drum. Solids are collected on the screen face, while the screened water passes through the screen face under gravity. Collected solids are discharged via the screen drum mouth. The internal feed tank controls inlet velocities and distributes the flow evenly onto the screen face.

Abigroup 119 8 Anglo American AngloGold Ashanti 90-92 133 Ansteel 101 Aqua Guardian Group Aquila Resources 34 Arup 70 42 Aspermont Atlas Copco 13 6 Aurecon Ausdrill 134, 135 Aussie Pumps 158 Australian Made, Australian Grown 24 43 Australian Strategic Policy Institute Autodesk 114 Automation IT 98, 99 Baxters 4 126, 127 Bearcat 66, 67 Bentley Best Tractor Parts 135 Betta Roads 102 BHP Billiton 4, 8, 16, 20, 21, 31, 33, 87, 160 Brenthurst Foundation 43 133 Brookfield Rail Cemco CITIC Pacific City of Busselton Codelco Cokal CST Wastewater Solutions Cuesta Coal Curtin University

56 87 130 38 47 159 46 88

David Wirrpanda Foundation Demag Cranes Downer Mining Draig Resources Durst Motor & Electric Industries

119 125 68 6 159

Enerpac 121 Engenium 6, 139, 140 153 Epicor Export Finance and Insurance Corporation 18 Export-Import Bank of the United States 108 Food Rescue Fortescue Metals Group Frontier Economics Fuel Fix

Charge checking SYDNEY-based Durst Motor & Electric Industries is showcasing its range of battery testers for automotive and electric equipment in the Australian mining industry. Durst, which was established 94 years ago, said its carbon pile load testers, ranging from 200CCA to 2000CCA, would handle all batteries up to and including N200s. The units provide an accurate load current control incorporating heavy duty carbon pile load rheostat resistor. Durst said all models came complete in a vented steel case, with a thermostat cooling fan, separate analogue volt and amp meters for easy operation.

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68 4, 34, 87, 134 46 144, 146, 147

GBI Mining Intelligence 112, 113 GE Intelligent Platforms 152, 153 Gindalbie Metals 133 8, 45 Glencore Globe 24-7 22 Goldfields Institute of Technology 88 Hancock Prospecting Hannans Reward Hill End Gold Hillgrove Resources Honeywell IDS Australasia IMX Resources Independence Group NL Ironclad Mining Iron Ore Holdings

14, 62, 108 6 30 6 38 104 6 90 6 32

Kaboko Mining 6 Kalgoorlie Consolidated Gold Mines 139, 140 Kaydon Corporation 96 Kiewit 127, 128 Komatsu 86 Konecranes 122 Kopex Waratah 157 Liebherr Linfox Loadrite Macmahon MCE Lasers Metso Minerals Minerals Council of Australia Mining Family Matters Minotaur Exploration Mintec

4 142 67 94, 95 156 55 26 28 16 110

Namakwa Diamond Co Newcastle Coal Infrastructure Group Newmont Mining Normandy NFM Norton Gold Fields Nyota Minerals

30 83 30 30 6 31

Oz Minerals


Panoramic Resources Peabody Energy Port Jackson Partners Qatar Holding QR National Qube Ports & Bulk Queensland Resources Council

137 47 76, 77 45 133 64 78

Rapid Crushing and Screening Contractors 50 Reed Mining Events 92 Reserve Bank of Australia 18 Rio Tinto 8, 85-87, 130 Rockmore International 158 Sandvik Mining Save the Bilby Fund Smenco South Australian Chamber of Mines and Energy Superled Electronics Synergy Metals

52 60 106 70, 71 158 30

116 Tamec Services Tasman Resources 16 The MAC 74 Thunderbox 30 Trendex Research 160 Total Coolant Management Solutions 148,149 Vale 87 Weir Minerals Western Australian School of Mines

48 88

Xiangtan Electric Manufacturing 85, 86 Corporation Xstrata 8, 45, 60




Expansion contraction BHP investors will be happy now that the Olympic Dam expansion has been shelved. The next challenge is how best to move on to the underground phase.


ome people were surprised when BHP Billiton announced the mothballing of the proposed $30 billion expansion of its Olympic Dam copper and uranium mine. Dryblower wasn’t. He was more surprised that planning for the “big dig” ever got as far as it did. Almost from the time the backroom boffins came up with a concept to create the world’s biggest man-made hole in the middle of South Australia, rumblings have been heard along the lines of “it’ll never work”. The main problem with the grand plan was time: • The time it would take to dig; • The time it would take to get government approvals; • The time-risk of the Chinese economy running out of puff; and • The time-risk that the uranium component of the project would be trashed by an event such as the Fukushima nuclear meltdown. And then there were two other issues not time-related – the sheer size of the expansion, the extraordinary funding requirement during a never-ending GFC and the lack of a fall-back plan. Size turned out to be as critical as time delays because the project, despite BHP being the world’s biggest mining company, could not take the risk of flying solo on an investment with the potential to inflict severe balance sheet damage.

Not having a plan B also exposed management shortcomings at BHP because the company cannot now quickly move on to a lower-cost, less-risky expansion of the underground phase of the mine. Today, all the problems are exposed, earning the company a curious mix of praise from investors for not putting their money at risk and condemnation from the SA government for falsely building its hopes of an election-winning project. Whatever the cause and effect, it is worth looking at what happened and asking how BHP could get it so wrong. And while Dryblower admits he did not foresee every issue, he could certainly see two time factors (approvals and digging) and was also worried about the daunting size of the big dig. It is astonishing that the expansion plan had so few critics despite the challenge of digging for five years without receiving any revenue and equally astonishing that no one saw the risk of a slow government approvals process, despite politicians using approvals to thwart resource development. What comes after the mothballing of the Olympic Dam expansion and the Port Hedland outer harbour is the issue which most interests Dryblower because those two events, plus go-slow decisions made recently by Rio Tinto, Xstrata and other big miners, could signal a new mining era. In two words, this era could be called “think small” and while it is a contradiction of

What next? BHP’s Olympic Dam.

the way the big miners have behaved over the past decade it does make commercial sense because big projects have simply become too big at a time of global economic uncertainty. Lower metal prices, higher capital and operating costs, plus tougher government approvals mean it is more appealing for even a big miner to think about smaller, more easily managed projects that might not offer economies of scale but do offer growth options. The missing plan B for Olympic Dam might be one of the first to surface as BHP considers how to boost profits from one of the world’s great orebodies. While too early to say that BHP’s decision to shelve some of its mega projects represents a fundamental shift in the way the mining industry works, there is that possibility because it’s not the only company looking closely at risk-reward trade-offs in a difficult business climate.

Predicting the cycle How long these difficult times will last is the $64 billion question which everyone in the mining industry is asking. And while the names of Nikolai Kondratieff and ESC Coppock are not routinely used in bar-room chats by mining types, they are worth checking out. Kondratieff was a Russian economist who angered his Soviet era bosses by publishing a radical research paper which predicted economic super-cycles, or long-wave events which dramatically change the world. The invention of the steam engine flagged

the start of a long-wave in the early 1800s, electrical engineering started another in the early 1900s. Today there is the Asian industrial revolution generating another Kondratieff wave of higher-than-average demand for commodities – and it is not a short-term event. Coppock, founder of Trendex Research, was curious about the psychology of a bear market, equating a sharp downturn in sentiment as being similar to a bereavement in a family. To test that theory he asked a bishop how long families mourned after a

death. The answer was 11-14 months – and that became the time factor in the Coppock Indicator, a tool which some market followers believe is flashing “buy”. Adding to the optimism contained in an analysis of the theories of Kondratieff and Coppock is the BHP Billiton factor, because its shelving of projects means reduced future metal supply, and reduced supply inevitably leads to higher prices. Perhaps, through tough decisions today, the seeds of the next phase of the boom are already being sown.

“Logic is the art of going wrong – with confidence.” – Joseph Wood Krutch 160

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Australias Mining Monthly - October 2012  

Crushing, Conveying, Fuels & lubricants, Iron Ore Holdings, Honeywell, Coal Asia Pacific, Long haul with China, Hancock Mining, Atlas Copco...