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June 2012

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INSIDE

• Queensland mining • Rio TinTo’s $300m pilbaRa Town • uRanium’s fukushima hangoveR


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87 Managing Editor: Michael Cairnduff Editor: Thomas Smith Contributing Editor: Tim Treadgold Journalists: Brooke Showers, Vetti Kakulas Production Manager: Mata Henry Senior Layout Designer: Diane Igglesden Layout Designer: Catherine Hogan Chief Sub-Editor: Andy Graham Sub-Editors: Melanie Jenkins, Alison Middleton Contributors: Robin Bromby, Michael Pascoe (Sydney), John McIlwraith, Stephen Bell, Mitchell Hooke, Elizabeth Murray, Tracey Cook, David Upton, Gomati Jagadeesan, Kristie Batten National Sales Manager: Kathy Zdanowicz Advertising Sales: Richa Fuller, John Andersen, Nigel D’Silva, Vanessa Monastra Advertising Production: Isaac Burrows (adproduction@aspermont.com) Subscriptions: Ph: (08) 6263 9100 Email: subscriptions@miningmonthly.com 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: editorial@miningmonthly.com, subscriptions@miningmonthly.com, advertising@miningmonthly.com Website: www.industry-news.net, www.miningmonthly.com 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

FUKUSHIMA HANGOVER The fallout from last year’s natural disaster in Japan is choking WA’s uranium mining industry.

Features 50 73 78 87 96 98 100 120

Queensland Mining & Engineering Exhibition Motors & Drives Remote Control Equipment & Technology Mine Safety Mining & The Environment Fluid Handling Australia’s Contract Miners & Drillers Australian Made

Regulars Editor’s Notebook Moves Hardware Software Market Watch

4 6 8 10 12

Michael Pascoe MCA Robin Bromby ASX Update Dryblower

20 26 34 64 124


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Editor’s

Fancy a sundowner?

Sundowner: drinks or social event held during the traditional cocktail hour, as the sun’s going down.

I

t’s been an interesting start to life at Australia’s Mining Monthly. On day one, I learned the meaning of the term “sundowner”. And the learning didn’t stop there. Then there were the acronyms. Too many to list. I’ve even managed to escape from the office and visit the companies that are making the Australian mining industry tick. First stop was Brisbane, for the opening of Komatsu’s new $55 million dollar Queensland headquarters at Wacol. Together with Sandvik, which opened a $50 million facility in New South Wales, these companies are investing in the industry at a time when everyone is talking about a Chinese slowdown. The experts may be right. Growth may be “flattening out”, to quote BHP’s Ian Ashby.

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But as Komatsu and Sandvik have shown, the big companies believe in the long term future of the industry in this country. They have, to coin that well-used phrase, put their money where there mouths are. That investment surely has to be the real barometer of what the general feeling is towards the Chinese question. As you will see in this edition of AMM, Rio Tinto is ploughing $300 million into the transformation of a Pilbara town – not the kind of investment you associate with the view that China is about to stop buying. The nice people at Vermeer very kindly invited me to view their new T1655 Terrain Leveler. The fact that Fortescue Metals Group took delivery of the first production model last year is, again, testimony to the strength of the Australian mining industry.

Brisbane at night.

Debate will continue as to the health of the Chinese economy. The fallout from last month’s federal budget will also be dissected. But from what I’ve seen on my travels, so far, the outlook is solid. Right, I’m off for a sundowner... thomas.smith@aspermont.com

JUNE 2012 amm


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© 2012 Caterpillar, All Rights Reserved. CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow,” and the “Power Edge“ trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission. Cat and Caterpillar are registered trademarks of Caterpillar Inc., 100 N.E. Adams, Peoria IL 61629.

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5/4/12 9:32 AM


moves

Varley steps up

JOHN Varley has been appointed senior independent director at Rio Tinto, succeeding Andrew Gould who has retired. Varley will resume his role as chairman of the remuneration committee. Additionally, Rio Tinto chairman Jan du Plessis has become a member of the remuneration committee. John Varley

Jason Needham

COMMISSIONERS Gold has appointed Jason Needham as exploration manager. Needham has more than 12 years experience and was previously exploration manager for gas company Dart Energy.

ST GEORGE Mining has announced Sarah Shipway as company secretary. Shipway succeeds Marcus Michael, who will continue as a nonexecutive director. Sarah Shipway ENERGY and resources specialists Ausgroup has appointed Leo Crohan as group manager business development. Crohan has more than 20 years experience in a variety of senior executive roles.

MONGOLIAN-focused coal explorer Draig Resources has announced Stephen Gye as the first member of its independent advisory board. Gye is an experienced coal consultant with more than 40 years experience. MINERAL sands-focused company Matilda Zircon has appointed Trevor Matthews as chief executive officer. Matthews was previously managing director and CEO at Murchison Metals.

THERMAL coal mining and export company Ambre Energy has appointed Graeme Booth as chief financial officer. Booth is a qualified chartered accountant who has held senior Graeme Booth executive roles with ABN Amro Bank NV and the Royal Bank of Scotland in London and Hong Kong. IRON ore exploration company Winmar Resources has promoted David Coad to managing director. Coad has extensive experience in the minerals, resources and agriculture sectors.

Scully was at security software provider Becrypt as executive vice president of sales. EMERGING iron ore producer IronClad Mining has announced Robert Mencel as chief operating officer. Prior to this position Mencel worked at Mount Gibson Iron as general manager of the Koolan Island project in Western Australia.

Mick Hardwick

David Coad

EXPLORER Argonaut has announced Ben Lane as director of the corporate finance team and Adam Miethke as director of metals and mining research. Both Lane and Miethke have spent the past three years working in Hong Kong at a mining investment group. Lane was previously a senior mining engineer at Rio Tinto and Miethke is a geologist. SOFTWARE and services developer Active Risk has appointed Nick Scully as vice president of sales and services for the Europe, Middle East, Africa and Asia-Pacific regions.

RAISEBORE Australia has welcomed Mick Hardwick as general manager. Hardwick was previously involved at RBA’s international operations in west Africa, Europe and New Zealand. He has more than 34 years experience in raise drilling.

WEST Africa-focused Burey Gold has announced the resignation of director Nigel Ferguson. CONSULTANT Aurecon has made key appointments to its managerial team. Doug Rogers has been appointed technical director and Bruce Leigh as lead construction manager within its resources and manufacturing services group. EXPLORATION company Carpentaria, which focuses on base, precious metals and bulk commodities, has announced Paul Cholakos is a non-executive director. Cholakos has more than 25 years experience in the resource and energy industry.

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JUNE 2012 amm


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10/05/12 5:14 PM


Hardware

Are you sitting comfortably? The thoughtful designers at Terex had operators in mind when they created the new Generation 9 trucks. By Thomas Smith

O

perators of the new Terex Generation 9 articulated trucks look forward to going to work. Why? Well, there are number

of reasons. For a start, Terex has designed the Generation 9 around operator comfort. This is a boast many comapnies make when launching a new range. But when you look at the facts, it’s hard to argue otherwise. OK, so what makes the next Generation 9 trucks different? Before we get too technical, let me give you an idea why Terex operators are happy workers. If you’re spending an entire working day in the same position, you’d hope your

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TEREX GENERATION 9 • Powered by Scania engines • Oil-cooled disc brakes • Range of cabin comforts • Fully independent front suspension • Maximum payloads up to 40t

employer would be kind enough to offer a little comfort and care. Terex have delivered this, by the articulated truckload. Reduced interior noise levels, improved air conditioning, high-quality sound system, new driver-friendly steering wheel and mirror arrangement are all part of the new

cabin design. There’s even a spot of luxury thrown in, with an anthracite grey matte finish on the cab’s interior – designed to reduce glare. I promised technical data, so here’s a taste of what the new Generation 9 offers. Terex says the new range is engineered to manage “some of the toughest applications encountered anywhere”. The trucks are powered by Scania engines and supported by an Australia-wide service network. As you’d expect, Terex is also promoting improved fuel efficiency compared to previous models. Greg Landsberg, from Terex distributor Terrequipe, is very happy with the new range.

JUNE 2012 AMM


TA300: Powered by Scania engines.

He said: “The new Gen 9 Terex articulated trucks are designed to keep users’ productivity levels high, fuel consumption low and cycle times short. “They were designed by Terex for the rigorous conditions found in sand and gravel quarries, mines and road construction. “To minimise downtime, service points are located for quick and easy access. The electronic-assisted hood raises and the fully tilting cab simplify access to major components and ground level service points. “As well as reduced downtime, lower cost of ownership is a key feature of these haulers. “All the Generation 9 range benefits from oil-cooled multiple-disc brakes on each axle, providing extended brake component life.

AMM JUNE 2012

“This reduces service intervals and operating costs, improving overall braking performance compared to traditional drydisc brake systems that are fitted as standard by many other manufacturers.”

“The new Gen 9 Terex articulated trucks are designed to keep users productivity levels high.” – Greg Landsberg, Terrequipe The smallest truck in the range boasts a hauling capacity of 15.5cu.m and is powered

by a 232kW engine, making the Gen 9 TA250 ideal for many construction projects. With a 276kW engine, the Gen 9 TA300, pictured, is one of the most powerful trucks in the 30t class. Another feature of the updated TA300 is the standard, fully independent front suspension. This design, also available as an option on the Gen 9 TA250, reduces operator fatigue and increases machine stability, which comes in handy when the terrain gets a bit rough. Completing the new range is the TA400, which has a maximum payload of 40 tonnes, a heaped capacity of 23.3cu.m and a gross power of 331kW. thomas.smith@aspermont.com

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Software

Making deadline COntRaCt miner Macmahon Holdings employed online software development company Deadline to develop an automated software tool to streamline the management of drill assets and identify replacement requirements to increase efficiency. Drillbit software tools have been in operation at Macmahon since 2011 and have been responsible for a number of improvements, such as speeding up data entry processes, improving equipment management, helping reduce unproductive wage spending, and enabling reports to be generated easier. Macmahon initially commissioned Drillbit to give it the ability to accurately predict budgets, reduce project delays and even help win tenders but is now available to mining and construction companies globally. “The drilling software more accurately predicts project costs, which has been a significant advantage for bidding on competitive tenders,” Macmahon commercial manager of engineering Simon Putna said. “It is a fundamental piece of software used in the day-to-day operations of managing drilling

equipment at MacMahon.” Putna said Drillbit had helped the organisation reduce wage spending, streamline asset management and improve operational efficiency. Drillbit manages drilling equipment in order to predict future project costs and foresee equipment breakdowns. Features and capabilities of the software include the management and data analysis of holes, cutters, rigs, rods and other drilling equipment components. Deadline business development manager Jodie Lunn said: “We designed the software tools specifically for drilling projects and it can be tailored to meet the specific needs of individual organisations.” With the ability to record information on holes relating to specific projects or locations, users can track drill assets, the status of equipment quality, and can monitor drilling progression. Drillbit provides on-demand reporting of project progress and can generate a range of reports to help identify trends and project statistics. By logging information on the drilling processes, mining companies can

R you watching tonight? WeSteRn australian based It and communications group R Group has been operating for more than 10 years, first launching a software product for the complete management and remote support of business networks in 2002. Fortescue Metals Group used R Group to implement an entertainment system for the Karntama Village camp. Its work there earned it a nomination for Product of the Year at the Western australian Information technology and telecommunications Industry awards. R Group says its mine camp entertainment system has been developed for the resource industry over the past five years and delivers entertainment and communication options which provide comfort and relaxation to mine staff in their free time. Offering suitable entertainment options to mine workers on remote sites is an increasingly competitive space and in some cases can be the difference between projects moving forward with well-staffed teams and delays due to the shortage of a desired skill base. R Group’s system provides tV and Foxtel and also support movies, news feeds,

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Workers can watch the footy on the big screen.

weather, site induction videos, and camp site information. It is scalable and can be customised to select which media, information and services are available to mine staff. The movie option, which is very popular with mine site workers, has two models available, free-to-guest and pay-per-view. R Group’s entertainment system can also be integrated with its pre-paid phone system, allowing users to add credit, check call history and manage a pre-paid account.

Deadline’s automated software tool is helping MacMahon’s drilling efficiencies.

more accurately predict project costs and delivery times to prepare tenders and deliver projects on time. The system also enables labour costs to be reduced and can eliminate unproductive waiting times for replacement equipment to arrive, because scheduling is managed more effectively. Deadline said the software can also improve workplace safety, as worn equipment can result in accidents.

Five-year deal for Orange RIO tIntO has awarded communication service provider Orange Business Services a five year contract to deliver networking and security services to more than 280 sites around the world, including remote mining locations such as Canga east in Guinea, Ulaanbaatar in Mongolia and almaty in Kazakhstan. The Orange contract consolidates It infrastructure, enhances network performance and further integrates global resources cost effectively. The partnership will also address developing business requirements and improve agility and flexibility. Orange Business Services will provide wide area network services including satellite access and network management, as well as secure internet gateways and traffic optimisation. “Orange’s global capabilities deliver considerable value to Rio tinto,” Rio tinto head of global business services Scott Singer said. “Over the past decade, Orange’s technology and service solutions have supported our divestment and acquisition activities.”

JUNE 2012 amm


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MARKET watch Watch these three closely

Mining services stocks are some of the hottest on the Australian stock exchange right now. Australia’s Mining Monthly asked financial adviser Damien Warner, from Morgan Stanley Smith Barney, for some of his top picks.

Damien Warner

Monadelphous Group (MND)

Mineral Resources (MIN)

Bradken (BKN)

Monadelphous is a quality engineering and mining services group with indirect leverage to the growth in mining activity. The company has a consistent record of delivering projects on time and on budget to major resource companies. It has a clean balance sheet which is currently in a net cash position and offers flexibility to expand into new markets and to tender for larger projects. We believe the number of LNG, iron ore and coal projects on the horizon should help improve future earnings. Monadelphous re-listed on the ASX in 1991 and operates from a number of locations throughout Australia.

Mineral Resources offers a unique combination of three independent businesses – pipelines (PIHA), crushing services (CSI) and minerals processing – plus a producing iron ore division. The growing mining services company has commenced many new projects recently which can potentially double earnings as they are brought online over the next few years. It is therefore viewed to be undervalued at its current price and forward price-earnings ratio. It has a strong cash position and is net debt free, allowing it to further expand or weather adverse situations better than its peers.

Bradken provides parts, equipment and maintenance services to the resources and rail industries. It is indirectly leveraged to growth in mining, particularly in iron ore and coal. The group’s expanding offshore footprint also has it well-placed to deliver earnings growth, should global economies recover. Debt has been reduced and the return to higher dividends recently is an endorsement of the company’s positive long-term outlook. The recent downgrade to its 2012 guidance, while disappointing, is seen as a unique circumstance within the rail division and a strong second-half performance is expected. Operating at 30 facilities throughout the world, it employs 5000 poeple.

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JUNE 2012 AMM


Focus on FMG’s MRRT court challenge

FMG chairman Andrew Forrest

FMG’s taxing battle Stephen Bell examines why Fortescue Metals Group billionaire Andrew Forrest is ploughing millions into challenging the controversial minerals resource rent tax.

C

onfirmation that Fortescue Metals Group is to challenge the MRRT in the High Court shouldn’t come as a great surprise to anyone. After all, Fortescue’s multibillionaire chairman Andrew Forrest has been a long-standing critic of the MRRT since it emerged in 2010 as a watered down version of Kevin Rudd’s short-lived super profits tax. But the company’s apparent willingness to spend millions of dollars on legal fees has puzzled some observers, given that Forrest has said several times of late that Fortescue will pay little if any MRRT when it becomes law on July 1. Under the legislation, established miners can reset the book value of their projects to a market value, creating a bigger shield against tax liabilities. Credit Suisse, for instance, predicts that Fortescue’s new Solomon mine, the key plank in its efforts to triple production, won’t generate a MRRT liability “until the end of the decade”. So why bother challenging the tax, even if

amm JUNE 2012

Fortescue regards it as an unfair impost on junior miners? In the past, Forrest has proved more than willing to protect what he sees as his commercial and reputational interests by using the legal system. For eight years, Fortescue has been trying to force Rio Tinto and BHP Billiton to open up their Pilbara rail lines to third parties.

Forrest recently described the government’s actions as a “Robin Hood-inreverse proposal”. And Forrest is still trying to clear his name over last year’s court win by the Australian Securities Investment Commission, which is seeking to ban him as a director over his 2004 portrayal of Chinese construction contracts as “binding”. So the MRRT challenge is just the latest in a long line of courtroom stoushes for Australia’s richest man.

And this one has a personal flavour for Forrest, who has engaged in a war-of-words with Treasurer Wayne Swan and Prime Minister Julia Gillard over their back-room dealings with big miners in 2010 to overhaul the original super profits tax. Forrest recently described the government’s actions as a “Robin Hoodin-reverse proposal”, which were used to remove then prime minister Rudd from office. Aside from all the posturing, Fortescue does have a sound motive in challenging the tax – probably on the grounds that it discriminates between the states and directly taxes state-owned resources. Fortescue, and many others, are worried that a potentially massive shortfall in Canberra’s budgeted $10.6 billion revenue take in the first three years will prompt more MRRT tinkering down the track. And, given Swan’s staunch rhetoric against mining billionaires, such changes would almost certainly penalise Forrest’s iron ore empire. editorial@miningmonthly.com

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The uranium enigma

Fukushima hangover Western Australia has some of the world’s largest uranium deposits, but the fallout from last year’s natural disaster in Japan is choking WA’s uranium mining industry. By Stephen Bell

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JUNE 2012 AMM


A

post-Fukushima hangover is dulling the prospects of a quick ramp-up for WA’s budding uranium industry. Back in 2008, sizeable yellowcake production seemed a mere formality after the election of pro-uranium Premier Colin Barnett prompted a rush of development proposals. But four years on the cupboard is still bare for WA, which boasts some of the world’s biggest undeveloped uranium resources – 207,000 tonnes in about 30 separate deposits at last count. Flat prices, along with ongoing doubts about demand in the wake of last year’s nuclear explosion in Japan, have crushed the ambitions of many uranium hopefuls. A recent report by Gresham Advisory Partners calculated that Australian uranium share prices rallied by an average of 101% in the eight months leading up to the Fukushima incident on March 11, 2011. Since then, prices have fallen 60%, much worse than the ASX 300 Resources Index, which only fell 17% in the period studied, the report noted. “We’re certainly not flavour of the month at the moment,” Toro Energy managing director Greg Hall said. Toro has been hammered by investors over the past year despite being the most advanced of the WA uranium hopefuls. After a marathon two-and-a-half year environmental review process, Toro hopes to obtain WA government clearances for its $280 million Wiluna uranium project as early as July. “We’ll see what happens, but we are quietly confident,” Hall said. If the expected green light is backed up by an OK from the federal environment minister, a final investment decision on Wiluna could be taken in the second half of this year. This would be extremely welltimed, as it means Wiluna would be able to start construction before the state’s next election in March 2013. This is important, as state opposition leader Mark McGowan, leader of the antiuranium Labor Party, earlier this year subtly shifted the party’s policy. McGowan said that if Labor wins then any uranium mines approved before that time would remain operational. As it stands, Toro is the only company capable of committing to a development

AMM JUNE 2012

FIVE KEY FACTS • Uranium share prices have fallen sharply since March 2011 • Market malaise follows Fukushima explosion in Japan • Uranium spot prices flat as Japan nuclear power demand dips • Progress at two key WA uranium projects has stalled • Toro confident of Wiluna project approval before WA election

before the state poll. This is a far cry from 2008, when hopes were high that up to four separate projects – Wiluna, BHP Billiton’s Yeelirrie, Mega Uranium’s Lake Maitland and Cameco’s Kintyre – would be lining up for approvals. In theory the three others remain in the development queue, but all are some way behind Wiluna. Both BHP and Mega Uranium have fallen off the pace, winding back the pace of approvals and focusing more on technical studies. Mega Uranium has gone from a supposed front-runner to laggard in the scramble to exploit WA’s yellowcake. At one stage, the Canadian company said it planned to have Lake Maitland, around 500km north of Kalgoorlie, starting production by this year. Mega badly under-estimated the time involved in gaining approvals, however. It now declines to say when it hopes to sanction the development, or even when it will achieve key environmental milestones. Lake Maitland was preparing a draft environmental review and management program – the highest level of assessment for WA mining and energy projects – to submit to the state’s Environmental Protection Authority, Mega executive vice president for Australia Richard Homsany said. But at this stage no fixed deadline had been set to lodge the ERMP, he said. The timing depended partly on drilling results and whether changes to the draft ERMP were needed, he added. “We have yet to fully analyse the results of the recent diamond drill program, however, there is potential for the magnitude of the known resource to be increase based on this work,” Homsany said. “If an increase in resource does eventuate then we may consider

increasing the production throughput, but are more likely to extend the life of the mine.” At present, Lake Maitland’s production forecast is unchanged at up to 1000tpa of uranium oxide concentrate over a 10year mine life. Despite the project’s slower pace and the market uncertainties caused by Fukushima, Mega’s Japanese partners remained supportive of Lake Maitland, Homsany insisted. Japan Australia Uranium Resources Development Co. and Itochu together have agreed to make staged payments of $US49 million to earn 35% of Lake Maitland. Under the farm-in arrangements, the Japanese partners would also be responsible for 35% of the project costs. BHP Billiton’s Yeelirrie project is also on the backburner. After reviving the longdormant project following Barnett’s election, the global miner began seeking approvals and predicted a construction start by this year. But it proved to be a false dawn for WA’s biggest (and highest grade) uranium deposit. BHP disbanded the Perth-based Yeelirrie team in late 2011 and deferred its ERMP. The asset is now run by a skeleton staff from the company’s uranium customer unit in Adelaide. “There’s not a lot to say on this other than the fact that we are continuing to work on realising the value of the deposit at Yeelirrie,” a BHP spokesman told AMM. “The project team has been resourced to ensure we have the right skills in place to take the next steps.”

Japan’s nuclear industry is still on its knees due to post-Fukushima reactor shutdowns. BHP plans to update Yeelirrie’s status later this year but the world’s biggest miner is probably in no hurry, given it is on the verge of committing to its Olympic Dam copperuranium expansion in South Australia, a project estimated to cost close to $30 billion. And, frustratingly for the WA government, BHP has a decades-old state agreement over Yeelirrie inherited from its 2005 takeover of WMC Resources. This allows BHP to dawdle, whereas the state would like to see some genuine progress on the big deposit. Capable of supporting a 30-year mine

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The uranium enigma life, Yeelirrie would significantly boost BHP’s exposure to uranium. However, with Japan’s nuclear industry still on its knees due to post-Fukushima reactor shutdowns, there is some doubt whether the market can support both an expanded Olympic Dam and Yeelirrie at the same time. Despite those doubts, front-runners Toro and Cameco are both bullish about uranium demand in the medium-to-longer term. Cameco, which is about 12 months behind Toro in the WA approvals process, has emphasised the importance of Kintyre and its other Australian uranium prospects to its global expansion plans. It plans to lift exploration spending in Australia by nearly a third this year after putting the country near the centre of its plans to double uranium output by the end of the decade. The Canadian company, which already accounts for roughly 16% of global uranium production, recently opened a Perth exploration office. “We see Australia as an absolutely key market,” Cameco Australia managing director Brian Reilly said. Kintyre, in the east Pilbara, is WA’s second biggest uranium deposit after Yeelirrie and would be a major boost for Cameco’s growth if it can reach production later this decade. Cameco’s existing target of late-2013 for a development decision is up for review. “We are presently reviewing the results of the prefeasibility study which has just been completed,” Reilly told AMM. “Once the review process has been completed, we will be in a better position to update the project timelines.” Cameco still has a few major hurdles to navigate ahead of a go-ahead, including filing its ERMP with the WA government

and signing a mining agreement with the indigenous land owners. Toro, meanwhile, aims to produce its first yellowcake in late 2013, subject to approvals and a final investment decision this year. It proposes to produce up to 1200 tons per annum of uranium oxide from the mine, which is expected to run for up to 14 years. Hall acknowledges that financing the venture may be challenging in the current climate. “The equity markets are tough as it is and, with the post-Fukushima doldrums still there, it makes it tough,” he said. Toro aims to sell around one-third of the project to help fund the development but prospective joint venture partners want to

see government approvals in place before committing to the venture. In the meantime, Toro has opened a technical data room to prospective partners, including Asian-based traders and end-users. Spot prices for uranium dipped after Fukushima and have recently hovered around $50 a pound, down from a 2007 peak of around $138/lb. But Hall believes the market has “bottomed”, partly because of delays at developing major new mines to supply countries such as China and India, which are still expanding their nuclear power industries. Recent flat spot prices have discouraged new projects, with most in the industry suggesting longer-term prices of US$7080/lb are needed to support future mine developments.

Most in the industry suggest longer-term prices of $US70-80/lb are needed to support future mine developments. Meanwhile, WA Mines Minister Norman Moore – a strong proponent of uranium over the years – is sticking to his guns on the state’s yellowcake future. “I do believe WA can establish a vibrant uranium mining industry,” he told AMM. “While WA’s uranium mining is expected to be on a small scale initially, it could bring $34 million dollars to the state by 2014, which indicates strong foundations for a new industry.” But the minister’s forecasts assume production of 5000tpa of uranium, a scale that looks highly optimistic in light of the ongoing Fukushima hangover. editorial@miningmomthly.com

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News

Green light for Anketell The Western Australian government will secure land for a major port development. By Tania Winter THE state government has moved to assemble the land required for the Pilbara’s next major deepwater port and industrial precinct at Anketell. Located 30km east of Karratha and 10km from Cape Lambert, Anketell will be developed in stages as a multi-user facility with an ultimate annual export capacity of more than 350 million tonnes. The development includes a related industrial precinct. Premier and State Development Minister Colin Barnett said the government had now issued notices under the state Land Administration Act 1997 and the federal Native Title Act 1993, identifying 4300 hectares. The Ngarluma people are the traditional owners and native title holders over a large area of the land and Barnett said the

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government was already working with the Ngarluma Aboriginal Corporation to negotiate a deal. He said the government was also considering a range of options for how the staged development of the port would proceed. In March, another candidate joined the fray trying to gain the development rights to Anketell, with private outfit Westralia Infrastructure reportedly talking to the government and miners. At the time the company, led by former federal assistant treasurer George Gear and former Babcock & Brown executive Cameron Edwards, told the Australian Financial Review it was liaising with the government and a number of miners. It reportedly wants to develop $A7 billion worth of open-access port and rail infrastructure in the region and if

successful, would look to China for finance. The heaviest users of the proposed port, Aquila Resources and Fortescue Metals Group, are keen to take over the reins as the preferred developer, but the WA Approval: government has yet to Colin Barnett. make its choice. Barnett has previously indicated he would prefer a consortium of miners, financial groups, super funds and third party infrastructure providers, rather than a single proponent. Other iron ore players that stand to benefit from the Anketell development include Finders Resources, Winmar Resources and Iron Ore Holdings. editorial@miningmonthly.com

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News

Perth finds the Solutions Global company SKF has opened its first factory in Australia. By Vetti Kakulas

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wedish bearings and seals maker SKF has opened its Australian Solution Factory in Perth, Western Australia. The global supplier of bearings and seals was founded in Gothenburg, Sweden in 1907. SKF group president and chief executive officer Tom Johnstone said the factory would help the company further support its Australian customers. This includes solutions for industrial fans used by the mining and mineral processing industries. The facility will provide SKF products and services from the company’s five technology platforms, including bearings, seals, services, lubrication systems and mechatronics. Perth was chosen due to its close proximity to the booming WA mining region. There are 18 SKF Solution Factories located worldwide and SKF has plans to develop

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more to allow further industry access to its technologies. “The global SKF Solution Factory program represents a vital element in our long-term strategy, as it repositions our business as a key provider of knowledge engineering to customers at all levels,” SKF director service division UK Michael Crean. A range of services is offered by SKF, including training and logistics and full service contracts to maintain company plants. SKF has 140 manufacturing and operational sites in 32 countries and is represented in more than 130 countries. Its establishment in Sweden spread rapidly throughout Europe, and by 1920 was well established in North and Latin America, Asia and Africa. More than 46,000 people are employed globally by SKF. vetti.kakulas@aspermont.com

SKF’s new Solutions Factory in Perth, WA.

15/02/2012 4:32:40 PM JUNE 2012 amm


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pascoe michael

Labourers aren’t labouring

An average tradie in WA can earn $130,000 a year. Nice pay, if you can get it. But we need to invest in education and skills to prepare for the (eventual) slowdown.

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s many a fella has found out the hard way, it’s often not what she says, it’s the way that she says it that really counts. And so it was with a newsreader on a northwest radio station when it came to Western Australian tradies’ pay rates.

Allegedly, a labourer prepared to put in a 50-hour week on a Perth commercial building or WA minesite can pick up $130,000 per annum. You may well have seen the story – WA labourers and tradies enjoy the highest rates of pay in the world. Well, the highest rates of pay in their field – there’s still the odd bank CEO who’s paid more than the men and women wielding hammers, pushing barrows and basking in the comfort of the CFMEU in the Wild West, but that’s about it. Allegedly, a labourer prepared to put in a 50-hour week on a Perth commercial building or WA minesite can pick up $130,000 per annum for it. And that’s before you start counting the skilled trades, let alone someone lucky enough to be a Pilbara wharfie in the employ of Mermaid Marine, and we won’t go near underwater welders for the sake of community sensibilities and the danger of not making lawyers jealous. (We all know the nation couldn’t afford the risk of lawyers seeking higher remuneration – that way anarchy and/or the US lies.) What made the story for me though was the little note of incredulity in the female newsreader’s voice when she came to the bit of the rip-and-read that said labourers and some tradespeople in strange foreign

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countries like the US and Britain were paid less than teachers and nurses. Can you believe it? By her voice, the newsreader was having trouble with the idea – she was clearly a child of the West who couldn’t quite grasp a society in which mere teachers and nurses might be better remunerated than a labourer or diesel fitter. (At this stage an old story comes to mind about a plumber finishing a minor job at a doctor’s house in one of the ritzier suburbs and handing over his bill. “Struth!” or something like that, exclaims the householder. “I’m a neurosurgeon and I don’t charge that much an hour!” “Yeah, I know,” says the plumber. “That’s why I retrained.”) There is a big value judgement somewhere

along the line here, as well as a simple market mechanism parable about supply and demand with a twist of industrial firepower. This is not just about the impact of the West’s resources boom straining the labour market in key areas, but that’s the obvious story. What many people in the southeast (and in Perth, for that matter) don’t want to accept is that wage and employment disparities are how the market solves problems of rationing limited resources. A signal gets sent and, eventually, supply rises to meet demand – or politicians are forced to understand that a whole bunch of workers with particular skills have to be imported. The dreaded “two-speed economy” has provoked an anti-resources backlash in some quarters – all you evil miners, pushing

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Michael Pascoe up the dollar, keeping interest rates high, forcing other sectors of the economy to become more competitive. Never mind that interest rates are higher than most developed nations because the overall economy is relatively strong, that the resources industries lift the nation’s wealth through that stronger dollar and by forcing a major restructuring into a greater value-added economy during a period of growth instead of the usual climate for restructuring – the crisis of a contracting economy. But beyond the immediate shortages of the boom’s construction phase, there lurks a danger that the market mechanism is better at handling immediate problems than long-term challenges. The resources boom won’t last forever. When it cools, we will have needed to vastly increase our investment in education and skills, to have become a much smarter country, or we’ll risk falling back in a heap. And there’s another reality about our demographics and health needs that we keep putting off. We need to value our teachers and nurses more than we do – they should be worth more to a progressive society than labourers. editorial@miningmonthly.com

Career change? The west’s labor shortage extends much further than the obvious construction skills – an important point made at a Pilbara Development Commission dialogue on the workforce crisis last month. While the tradies and operatators get the headlines, a much greater number of jobs are being created outside the mine gates. If I was paying attention at that Perth dialogue, a figure of more than 176,000 was mentioned for WA, a multiple of the actual mine jobs. A key point made by the impressive Dr Ruth Shean from the WA Department of Training and Workforce Development was the danger that created for the rest of the workforce – the risk of the state finding itself short of everyone from police to the aforementioned teachers, as people in important employment for a functioning society were hoovered up to serve the construction phase of the boom. It’s hard enough dealing with the frontline needs that grab the headlines; it’s a harder task again to plan for everything else.

It’s cheaper to build IT WAS a shame Andrew Forrest wasn’t at that PDC event – he could have saved a few million through some free tax advice. Australian billionaires don’t seem all that keen on paying tax if they can possibly avoid it – poor little darlings – and that often leads them to go to extraordinary lengths to avoid it. I suspect Kerry Packer wrote the form guide for billionaire tax policy, a guide fanatically followed by those in the club. Who will ever forget the fervour with which Forrest and Gina Rinehart manned the barricades against the idea of a resources rent tax? More recently, the Twigster went on the record with the claim that he would have to pay a whole bunch more fringe benefits tax if he housed miners permanently instead of flying them in and flying them out and flying them in and shaking them all about. Well, that’s not necessarily so, according to ernst & Young partner Tanya Ross-Jones. There’s always a bit of hokey-pokey with tax but Ms Ross-Jones raised quite a few eyebrows by explaining that, correctly arranged, local housing in the Pilbara can qualify for the same FBT exemption enjoyed by FIFO costs. I suppose the trick then becomes that you have to really want to build a community, instead of just talking about it.

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Focus on Queensland’s new government

Farming or mining Does this look like the future of Queensland mining? With a change of state government, Australian mining companies are waiting to see if Queensland will open its doors to miners or farmers. By John McIlwraith

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he new Queensland government has received a mixed report card from the State’s resources industries, with a quickening flow of approvals a strong plus. They have received a satisfying number of ticks, after a time in which some projects and exploration programs were held up for years. Reforms in environmental processes appears to be one of the factors in the improvement category, one of the promises made by the incoming government during the election campaign. On the negative side of the ledger, two coal projects near Toowoomba will not proceed – Acland Stage 3 (sponsored by New Hope Corporation) and Felton CTL (Ambre Energy) under another measure that was foreshadowed in the election.

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The government has also declared the Scenic Rim local government area off-limits to coal-seam gas exploration and coal mining.

The government’s stated goal of doubling food production sends a signal to miners that they will have to fight for every hectare of land. In the longer term, a structure of regional planning could cause the resources industries some concern, as the government wrestles

with the challenge of balancing the claims of mining and coal seam gas developers against the justifiable concerns over the preservation of agricultural land. The government’s stated goal of doubling food production sends a signal to miners that they will have to fight for every hectare of land. The spectacular increase in the potential of key industries like coal indicates the challenges in terms of balancing priorities. A decade ago, the Galilee Basin was thought to have coal reserves of less than four billion tonnes and its distance from ports made the region unattractive for miners. Today, the basin is estimated to have 28Bt of coal and massive projects are underway. Bigger coal carriers and ports and more efficient rail systems, coupled with much

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coalition government’s offer to simplify and speed up the approvals process. He said: “Some development projects are strangled in a tangled web of green tape, as they navigate their way through a myriad of federal, state and local rules and regulations. “Currently, 135 development proposals from Queensland are awaiting decisions at the federal level. It is a costly and time consuming process that can deter investment.

The state government has quickly supported a commitment from the federal opposition to introduce a one-stop-shop environmental process.

higher prices, have made such relatively remote regions attractive for coal mining. The new state government has been quick to challenge the federal government on a number of issues, including environmental approvals. The Queensland environmental authority was criticised for its tardiness in this area – some mining companies claimed that elements in the appropriate departments went to great lengths to find reasons to delay or reject projects. The state government has quickly supported a commitment from the federal opposition to introduce a one-stop-shop environmental process. Deputy Premier and Minister for State Development Jeff Seeney said the LNP government would take up a future federal

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“This is exactly what Premier Campbell Newman proposed to the current prime minister at the last Council of Australian Governments meeting.” Seeney said having a one-stop process at the state level would provide an effective and efficient environmental assessment and approval process. Queensland Resources Council chief executive Michael Roche said after the election that the council would want to talk to the Newman government about any loopholes that allowed mining’s “ideological opponents to misuse the Courts to disrupt and delay”. He said: “Genuine community concerns deserve the opportunity to be aired, but there is a real danger that the anti-coal movement is gearing up to litigate the industry to a standstill. “Is this strategy against coal and coal seam gas getting a grip in the community?” Roche said that despite what had been described as a massive groundswell of public opinion against mining and the coal seam gas industries, voter exit polling at the election told a different story. An independent polling organisation interviewed 400 voters in the 20 most marginal ALP electorates. The first thing the pollsters discovered was that mining and CSG were not in the top 10 influential issues for voters. In fact, CSG was the most important issue for only 3% of all voters and only 2% of LNP voters. For those voting for a minor party, CSG was the top issue for only 6% – so even the Greens could not convince its own supporters that CSG was a vote-changer. Roche noted that the LNP had committed to developing a new system of statutory land use planning for resource regions. The intent is to identify and protect strategic

cropping land and map out preferred land uses across each region. The new government believes that a system of land-use planning will provide security for both landholders and resource proponents. A particular focus of the QRC will be to ensure that there is a transition to the new system that allows resources investment to flow. Roche said: “The new government has committed to a whole of government approach to restore Queensland¹s reputation for minimum sovereign risk. “The latest Fraser Institute Mining Survey tells us why this commitment is so important.” The state’s mineral prospectivity puts it high on the list for global exploration managers to consider but Queensland is still sitting well down in 28th position on what the Fraser Institute describes as its Policy Potential Index. This is essentially its overall ranking for mining and exploration. In other words, when all the plusses and minuses of a mining jurisdiction are weighed up, Queensland is still seen as being a tougher environment for exploration than the other major mining jurisdictions of Australia, such as Northern Territory (11th), Western Australia (12th) and South Australia (19th). Roche said: “Sadly, we’re also sitting behind the likes of Finland, New Zealand and Botswana.” He said the council would be looking to emphasise that the state was living off discoveries from a number of years ago and needed policies that underpinned the process of discovery. Queensland, at current production rates, has only 13 years worth of known copper reserves left, 12 years of zinc and 11 years of silver.

The Galilee Basin is estimated to have 28 billion tonnes of coal and massive projects are under way. He added: “We know from the Geological Survey of Queensland prospectivity data that there is a lot more of those metals in Queensland to find. “But the reality is that unless this prospectivity turns into discovery, we do not have a long term future in metals like copper in Queensland.” One obvious issue the council will address is the state’s ban on uranium mining. This was a long held policy of Labor governments but has been eroded across Australia in recent years. editorial@miningmonthly.com

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News

$10B port project mooted Q

ueensland’s coastline could be home to the largest coal port in the world if approvals for a new $10 billion export terminal go ahead. The proposed Dudgeon Point coal terminals project in North Queensland will be adjacent to the Hay Point and Dalrymple Bay terminals and will increase the area’s coal export capacity by 180 million tonnes per annum to a total of 320Mtpa. Indian based company Adani Group’s subsidiary Adani Mining and DBCT Management are proposing to build the terminals in conjunction with the North Queensland Bulk Ports Corporation. The draft terms of reference for the project, based 25km south of Mackay, near the Port of Hay Point, were released for public consultation in April.

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“If approval is granted, Dudgeon Point will become one of the largest ports in the world,” Minister for State Development Infrastructure and Planning and Deputy Premier Jeff Seeney said. “It will open Mackay to an international coal export market, hauling in billions of dollars for Queensland’s economy. ” If approved, the project will involve building two separate terminals with a combined export capacity of 180Mtpa and the construction of six rail loops and train unloading facilities. A rail connection to the Goonyella rail system with a rail overpass at Hay Point Road will also be constructed. Offshore wharf facilities will be developed to occupy ten ship berths with two connecting jetties. Under the proposal, the tug facilities will

The proposed Dudgeon Point coal terminal project, near Mackay, Queensland.

also be expanded to accommodate up to ten more tug and service berths. Because the Dudgeon Point coal terminal has been recognised as a large scale and complex development, it requires an environmental impact statement to be prepared. Seeney said if the terminal went ahead, the increase in coal export capacity would attract significant investment to the area, boost the Queensland economy and promote growth in the state’s coal export industry. brooke.showers@aspermont.com

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Federal budget analysis

Miners dodge Swan bullets The federal budget did little to cushion the impact of the minerals resource rent tax. By Stephen Bell

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reasurer Wayne Swan did the mining sector few favours in his latest “battlers” budget, which used spending cuts and big mining taxes to fund payments to lower and middleincome earners. Swan’s ditching of the promised cut in the corporate tax rate by 1% to 29% also helped fund the welfare measures, but angered miners who had hoped for some pain relief from the new minerals resource rent tax. Neither was there much in the budget to address the industry’s current struggles with wage inflation, union battles and a strong dollar. Those problems, when combined with the Gillard government’s obsession with redistributing minerals wealth to mumand-dad voters, are high on the worry list of miners, big and small.

Major projects cost almost 10 times more, and take longer to complete, than they did a decade ago. Speaking a few days before the budget, Rio Tinto chief executive Tom Albanese warned that foreign investors were now anxious that multinational miners like Rio were “over-exposed” to Australia because of its high costs, low productivity and erratic tax policies. Major projects cost almost 10 times more, and took longer to complete, than they did a decade ago, Albanese said, fuelling

speculation that Rio might not go ahead with a planned expansion of its Mount Pleasant coal mine in New South Wales. The Rio chief ’s comments were made amid widespread speculation – later proved to be unfounded – that the diesel fuel rebate would be chopped in the budget. If Swan didn’t provide any specific sweeteners to miners – there was no sign of any meaningful spending on much-needed port infrastructure in WA – neither did he risk another major spat by scrapping the rebate. Its demise would have saved the government $2 billion a year while decimating many coal and iron ore projects, particularly those with big earthmoving requirements. So the industry dodged a very large bullet on diesel. Yet further tinkering with the rebate – which is already being cut by 6.2 cents a litre as part of the carbon tax package – is not being ruled out by investors. “The rebate may not be off the political agenda, as the Australian Greens, which hold the balance of power in the Senate, have publicly stated it should be removed,” noted UBS. Meanwhile, the government lowered its forecast MRRT revenues to $9.7 billion in its first three years, down roughly $1 billion on earlier estimates. The lower tax take is hardly cause for celebratory champagne popping, however, as they mean Treasury now expects miners to earn less due to weaker commodity prices. And many in the industry believe the forecasts are still overstated because Fortescue Metals Group has said it will pay little or no MRRT in the early years. The carbon tax looms as another big drag

Treasurer Wayne Swan.

on profits from July 1. The government estimated the tax on Australia’s biggest carbon dioxide emitters will raise $24.7 billion in the next four years. A significant chunk of that is expected to come from the resources sector. Ironically, the government’s new taxes and spending cutbacks may produce an unintended windfall in years to come. This is because the Reserve Bank will face pressure to stimulate the economy, probably by cutting interest rates further. If so, the Australian dollar may keep falling. That would be rare good news for tax-slugged miners. editorial@miningmonthly.com

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AMM JUNE 2012

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MineralS Council of Australia Mitchell H. Hooke – Chief Executive Officer of the Minerals Council of Australia (MCA) since June 2002.

Shh...it’s the silent boom Guest columnist Dr Ed Shann says Australia’s biggest boom is not in the mining industry, but the services sector that supports it.

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reasury and the Reserve Bank of Australia use different methodologies to produce radically different estimates of the size of the mining and related sectors. The Reserve Bank estimate is clearly too low, as it excludes mining output for the domestic market and mining service exports and investment. Treasury estimates that the mining sector, including metals manufacturing, will account for 12.3% of total Australian real output in 2011-12. The strongest growth has been in mining services, which has doubled from 4% of output in the decade to 2002-03, to an expected 8.4% in 2011-12. Mining services output is growing rapidly at 15-20% a year and Treasury estimates that on the back of the mining investment boom it will expand from 6.7% of the economy in 2010-11 to 9.4% in 2012-13. Yet some commentators continue to think of the mining sector as relatively small. On Budget forecasts, Treasury concludes that over the three years to 2012-13 the mining sector will grow annually at 5% and miningrelated sectors at over 20% on the back of the investment boom. By contrast, non-mining sectors comprise 75% of the economy, but are growing annually at only 1%.

when investment peaks, output will rise and boost service firms involved in mining and maintenance. There are 122 firms listed on the Australian Securities Exchange with substantial mining service revenue of $86 billion in 2010-11 and with expected revenue growth of 17% in 2011-12 based on broker forecasts. Twenty of the top 150 ASX firms by market capitalisation have substantial mining service revenue. On one estimate, they generate export revenue of around $9 billion.

Mining companies demand high quality competitive inputs. This has created many leading edge mining service firms that invest in research and development, enabling them to export and compete offshore. The rapid growth in mining services reflects the surge in mining investment, increased contracting out to specialist providers by mining firms and the growth of sizeable Australian mining service firms that are diversifying internationally by both exporting and producing offshore. Mining service industry growth has been customer-driven and public policy has not played an important role. While mining construction will decline

The rapid growth in mining services reflects the surge in mining investment. This column was prepared for the MCA by Dr Ed Shann, who worked in the Departments of the Treasury and Prime Minister and Cabinet in the 1970s and 1980s and was a director of Access Economics in the 1990s. His PhD from Cambridge was on “The effects of a mining boom”. This piece was from a policy monograph entitled Maximising growth in a mining boom. editorial@miningmonthly.com

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Focus on China

Trends, paradoxes and predictions John McIlwraith examines the Chinese slowdown and the resulting impact on the Australian mining industry.

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hermal coal prices will fall by more than a third in the next five years – and the rate of growth in prices for coking coal and iron ore is set to decline. But industry experts believe that none of these factors signals a dramatic slowing of the resources boom. That’s the view of resource companies and independent economists as they study a moderate fall in forecasts for Chinese growth.

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SPEED BUMP? • Iron ore and thermal and coking coal export prices will dip in the next five years • Experts say prices will remain historically high • No serious threat to the Chinese economy or Australian exports • Economists sceptical of reports of an expected fall in Chinese economic activity

The concern in Australia is understandable. In the last financial year, minerals and energy earned $200 billion, much of it generated in China. Interestingly, the sanguine responses to overheated warnings about a Chinese apocalypse are typified by ANZ’s China economist Liu Li-Gang, who predicted that its economy would grow by as much as 9% this year. He doubted the accuracy of recent negative

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as mining moves further into China’s western provinces, which are further away from large consuming centres on the southeast coast. ABREE notes that China has been the world¹s largest importer of iron ore since 2004, yet it has major deposits of its own. Over the medium term, Chinese steel producers are expected to increase their reliance on imported ore, due to declining quality of domestic reserves.

The concern in Australia is understandable. In the last year, minerals and energy earned $200 billion, much of it generated in China.

data and said a wider range of surveys were more positive. Most of the analysts have already priced in a medium-term slowdown in commodity demand in China, he points out. China presents a paradox, as it so often does, in sources of raw materials. As a report by the Australian Bureau of Resource and Energy Economics points out, it is the world’s biggest producer of coal and also the biggest importer. It is still an exporter – though volumes have now fallen to negligible levels. While China is the world’s largest coal producer and its production will increase over the medium term, increases in domestic supply are expected to be limited by high mining and transportation costs. Increases in mining costs are associated with new coal deposits that are at greater distances from existing infrastructure and further below the surface than previously mined deposits. An increased focus on the environment and safety is also expected to place upward pressure on mining costs due to compliance. Transport costs are expected to increase

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An increasing number of steel mills are located in coastal regions with easy access to ports. Efforts are being made to increase the average grade of steel produced in China, necessitating an increased demand for relatively high-quality iron ore imports from Australia and Brazil. Over the next five years, China’s imports are projected to increase at an annual average rate of 5% to reach 854 million tonnes, accounting for more than half of global imports. Australia’s exports of iron ore are forecast to increase at an annual average of 10% to total 779 million tonnes in 2017. ABREE says in the same report that while the fall in thermal coal sales over the next five years appears alarming, it will have slid from a record of $US130 a tonne last year. The anticipated figure of $82 a tonne will be the result of a significant increase in production from a number of suppliers, including Australia. The bureau notes that despite this significant decline, prices will remain relatively high in historical terms. Despite concerns over greenhouse levels, consumption of coal used in power generation will continue to rise in Asia. In another paradox, the fall in prices will not discourage Australian expansion. Exports will increase at 11% annually over the next five years, indicating that the industry expects to remain profitable, even as prices fall. The decline in coking coal prices is already occurring, with a forecast coking coal will decline 23% this year to $221 a tonne amid weaker import demand and an increase in output from Australia. ABREE forecasts lower prices through to 2017, as exports from countries including Mongolia, Canada and Mozambique climb, according to the report.

Prices for metallurgical coal in the March quarter were settled at about $235 a tonne, a decrease of 18% from the December quarter price of $285 a tonne. The decrease in prices is largely a combination of weaker import demand growth from large steel producing economies and increased exports from Queensland, as mines return to normal production. These factors are expected to continue to influence metallurgical coal prices for the remainder of 2012, resulting in a 23% decrease in average contract prices year-onyear, to $221/t, with further declines over the next five years. A decline, but not a collapse, is expected in iron ore prices. Laura Brooks, a consultant for the steelmaking raw materials unit of commodities market analysts CRU, says: “We don’t expect conditions to revert to pre-2003 levels, but we do expect a persistent slowdown in the foreseeable future.” She expects China’s demand to eventually cool to a persistent and significant slowdown – a trend mainly apparent after 2015, with the transition complete by 2020. CRU expects Chinese demand will remain robust and supply tight over the immediate term, as new iron ore projects are likely to continue being pushed back due to funding and infrastructure constraints. Brooks says after 2015, the Chinese economy – and, accordingly, steel use – will begin to mature, while Indian economic growth, although strong, will not fully compensate for the slowdown in Chinese iron ore consumption.

China has been the world’s largest importer of iron ore since 2004, yet it has major deposits of its own. BHP Billiton recently said Chinese iron ore demand had started to flatten, but there was a price “floor” of $US120 a tonne, based on the cost of domestic iron ore production in China. Rio Tinto has said it was confident the Asian superpower would have a soft landing. This year, ABREE forecasts world trade in iron ore is to increase by 7%, to reach 1.1 billion tonnes. Over the medium term, this trade is projected to increase at an annual average rate of 5%, reaching 1.5 billion tonnes in 2017. China’s imports are projected to continue to grow strongly, while the majority of growth in iron ore supply is expected to come from operations in Australia and Brazil. editorial@miningmonthly.com

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Focus on the BHP unions dispute

Not in union Tim Treadgold examines the issues splitting BHP and the unions.

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anagers manage. Workers work. It sounds simple but when you get down to the detail of defining management and work the devil raises his head, as the mining industry is seeing in the BHP Billiton Mitsubishi Alliance dispute, which has bogged down the world’s biggest producer of metallurgical coal. For the past 18 months, three unions have been at loggerheads with management at BMA, which operates seven mines in Queensland. And there is no resolution in sight. A series of rolling strikes and go-slows have limited coal production which, coming on top of floods in central Queensland, created the conditions for BMA to declare force majeure on some of its shipments, a situation which releases the miner from the terms of its contracts because it doesn’t have enough coal to sell. If the BMA dispute was a conventional argument over rates of pay it might be easier for an outsider to understand why it has dragged on for so long. Unfortunately, there is nothing simple about what’s happening at BMA because it’s not just about money; it’s far more philosophical than that and hinges on the opening observation about managers managing and workers working. Taken to its extreme, BMA argues that the unions want to take management control of the business with demands that include: • Limits on the use of contractors; • Limits on the amount contractors can be paid; • A third rostered break during 12-hour shifts; • Preference to employees over contractors in training; and • The right to control mine safety through the appointment of union safety officers. In reply, BMA has offered annual pay rises of 5% over three years, plus a guaranteed annual $15,000 per man bonus – and nothing else. On the union demands over contractors, safety and shift breaks there are no concessions, just a promise to fight. Last month, management sent a reminder about the power it holds over the business by announcing the closure of the loss-making BMA mine, Norwich Park.

amm JUNE 2012

BHP Billiton chief executive officer Marius Kloppers.

BHP Billiton chief executive officer Marius Kloppers refused to link the union action with the Norwich Park closure, saying: “We have a long-standing policy of not operating facilities that are losing cash.” Outside observers are less coy. They see a direct link between the closure and the dispute, pointing to a leaked email from BHP Billiton chief executive ferrous and coal Marcus Randolph in which he said the dispute was to “protect managerial prerogative”. “This is the fight we had to have,” Randolph said. “The issues the unions are trying to force us to accept cut right to the heart of management’s ability to manage, and the underlying productivity of our operations. “These issues are not negotiable, not now, not next month, and not next year.” If union members reject a proposed settlement being offered in a secret ballot which closes on May 18, then BMA could be on track for a Qantas moment: just as Qantas

management grounded its planes, BMA’s management team could close all mines to force the intervention of the industrial umpire, Fair Work Australia. Extreme as it might sound – and Qantas grounding its entire fleet to achieve resolution of an industrial dispute was the most extreme step ever taken by corporate management in Australia – there is a very real chance that the BMA dispute will go the same way.

There is nothing simple about what’s happening at BMA. “Everybody out” might be the traditional union cry but this time it might be an order issued by management determined to stand its ground against unions demanding more say in how BMA is managed. editorial@miningmonthly.com

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M

echanical engineering specialist Meridian Engineers has commissioned its latest train loading improvement system. Crushing Services International, a Mineral Resources subsidiary, is using the Meridian system for the loading stations at Polaris Metals’ Carina iron ore project, 170km from Kalgoorlie in Western Australia. Since commissioning the technology, CSI has been able to deliver train loads at 100% of target, with no overloading. Accurate wagon loading reduces track wear and improves efficiency by fully utilising a wagon’s capacity. The technology includes customised data processing, user interfaces, a calculation and display of wagons in real-time and control of train loading and load centring in the wagon. The system can send the designated user reports via automatic emails, including real-

time measurements of the weight of the loading wagon’s content. CSI built a train loading facility for this project to transport ore from the mine to Fremantle port for export. The trains provided for the Carina mine use 120 wagons and were initially capable of carrying about 70 tonnes of ore. CSI said it was important to load trains accurately without overloading the wagons, to prevent damage to the fleet and rail network. This involved loading the wagons to a target gross load of 90 tonnes and not exceeding 92t – an extra 20t compared to the previous limit. If the trains are not loaded correctly, a loss of ore means that money is wasted. Meridian Engineers won a technology and innovation prize at the Australian Bulk handling awards in 2011 for the commissioning of a train loading system at Fortescue Metals Group’s Christmas Creek

The Meridian train loading facility at Polaris Metals’ Carina iron ore mine, WA.

mine. The systems have also been used at Griffin coal mine near Collie, WA, Integra coal mine in New South Wales, Wesfarmers’ Curragh coal mine at the Bowen Basin, Queensland, and the Whitehaven coal mine in NSW. vetti.kakulas@aspermont.com

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BROMBY ROBIN

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Demand for natural resources has never been greater but we’re going to need new mines to cope with demand.

W

orking on a deposit that might make a mine development by, say, about 2017? Then you should be

concerned now. There was considerable publicity out of the recent copper conference in Chile about the usual supply-demand and price issues for the red metal. But the annual get-together in Santiago, staged by the Center for Copper and Mining Studies, dwelt on a couple of industry issues, too. Thanks to a note sent out by Citigroup, one issue that received a great deal of attention was the shortage of mining engineering expertise, particularly within the major mine engineering consultancies. The major miners highlighted the difficulty in booking time with consultants to work on projects. While shortage of skilled labour was acknowledged – and it has been widely discussed worldwide – the engineering problem is increasingly stressful because of the sheer number of precious metals, base metals and iron ore projects around the world that are at present being designed and built.

What are we doing about it here in Australia? The point the Citigroup analyst made was that this is inviting time slippage to the whole development process, affecting both scoping and design aspects. “However, this was not

Stuck in the waiting room: Many projects face delays.

seen as so much of an issue for projects close to completion in terms of development, that is, those due for commissioning in 2013 or perhaps 2014, but projects that are scheduled for design or build stages in the second half of the decade,” the note said. Reflecting on this note, it seems that only a major economic dislocation is capable of slowing down the demand for mine developments in the coming years. This particular meeting was, of course, preoccupied with copper; in its case, there is a strong body of opinion that sees a real struggle to bring on enough mine capacity to meet global demand for the metal.

Despite having had some dog-day years, zinc is in a similar position, with some of the world’s biggest mines facing exhaustion in the next few years. There might be some slack in demand for mines in some sectors – nickel, possibly – but there seems hardly a metal whose users won’t require new mines to be opened or existing ones enlarged between now and 2020. But what are we doing about it? More specifically, what are we doing about it here in Australia? No one – outside the industry – cares. That’s the truth of it. editorial@miningmonthly.com

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Off track BUT if it’s a state issue, which affects revenue streams, then some attention is paid. Turning to another conference, at the recent Adelaide meeting for the South Australian Resources & Energy Conference there was talk about the serious gaps in that state’s infrastructure. How come Australia always makes such a pig’s bum of infrastructure for its resources industry – unless, of course, the big miners control it themselves as they do in the Pilbara? But leave it to governments, and they always come up short. In the Pilbara in Western Australia you have the rail systems run by BHP Billiton, Rio Tinto and Fortescue Metals Group. But, down south, the story is a shocker. Much of the wheatbelt is crossed by agricultural railway lines built to carry grain. But if they haven’t already been closed then they’ve been left to decay. There’s at least one potentially big iron ore project that could make use of some of these rail lines but the existing track could not take the weight; at it stands at present, the thinking is to truck the ore. The two “missing links” in the Queensland coal rail system are another example of government rail systems being slow off the mark. And, probably, we will never see the proposed inland rail built between Melbourne and Brisbane that would be a boon to various proposed mines in central NSW. True, the Darwin line was built with federal and state backing but the initiative and effort were the work of a private consortium. Now SA is facing up to the music, being caught woefully inadequate if the Olympic Dam expansion goes ahead. The state needs a total makeover to bring power, water and roads to all the potential new mine operations. And a new export port.

Astronomical AND just a mention of the plans by the Google guys and filmmaker James Cameron to mine asteroids for precious and rare metals. Goodness, it’s only a few months since the Japanese were going to solve all the world’s rare earth problems by mining seemingly limitless deposits in the great depths of the Pacific Ocean. The one thing these stories never go into is cost. When some Australian gold producers now have cash costs up to $1200 per ounce, what will be the cost of an ounce taken from an asteroid? When rare earth prices have plunged and cerium might be worth only $US10/kg, what are the cash costs 4000m below the ocean surface?

AMM JUNE 2012

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H o m e i s w H e r e t H e i r lo v e d ones are. aussies love sports. so keep your workers happy by bringing aFl superstars like Chris Yarran to the mines. with our new mining Packages, your hard working staff can have their very own FoXtel box, so they can switch on to hundreds of live games across a number of sporting channels, including the new FoX FootY channel. with this much sport at their fingertips, plus an impressive selection of music, entertainment and movies, they’ll never want to work anywhere else. Find out more by calling our FoXtel Business mining specialist today on 08 9386 9535 FoXtel is not available in some areas/buildings. FoXtel marks are used under licence by FoXtel management Pty ltd. FoX sPorts channels, FUel tv, sPeed and FoX FootY not available in licensed premises. some channels not available in public viewing areas. FoX0231/mm


News

Rio scholarly Rio Tinto and the University of Western Australia have created a multi-million dollar mining education program. By Brooke Showers

R

io Tinto is pumping $3 million into an Australian university to help train the next generation of miners. A partnership has been struck with the University of Western Australia to fund projects and master classes over the next five years, providing scholarships for more than 40 students. The deal is the first step in Rio’s Global Education Partnerships Programme, which will foster skills for the future, build education capacity – and provide more graduates for Rio’s mining projects. Rio Tinto executive director Sam Walsh said the relationship with UWA would further enable young people to reach their true potential. “Aside from further developing our relationship with UWA, this program will increase Rio Tinto’s access to quality graduate and post-graduate students seeking mining industry careers,” he said.

amm JUNE 2012

A major focus of the program will be to encourage more female, international and indigenous students into the core disciplines of engineering sciences and geology. Rio’s sponsorship will extend to Girls in Engineering, a program which aims to develop confidence in practical skills and the application of scientific concepts, as young women progress through education. “This partnership will provide a diverse group of scholars with access to real life work environments and work experience, and increase the university’s attractiveness to potential students,” UWA vice chancellor Professor Paul Johnson said. UWA has a strong history of collaboration with Rio Tinto, as they enter a third year working together on a joint rock art recording field school, based at the Burrup Peninsula in northwest WA. A joint agreement between

UWA vice-chancellor Paul Johnson and Rio Tinto executive director Sam Walsh.

UWA and Rio Tinto was formalised in April, with Rio investing in a rock art studies course at the university to protect and increase Aboriginal heritage. Rio Tinto has committed more than $1 million to have rock art preserved, catalogued and researched for the next six years. brooke.showers@aspermont.com

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Focus on Rio Tinto’s Pilbara expansion

Investing in a community Rio Tinto has announced plans to transform a remote town as part of a major expansion in WA’s Pilbara. By Alison Middleton

R

io Tinto is ploughing $300 million into a remote Pilbara town as part of a major expansion of the company’s iron ore production

capacity. The company has been granted state government approval for major renewal and expansion plans which will transform Wickham, a small town near the port of Cape Lambert, about 60km east of Karratha. The upgrade is supporting Rio’s production expansion to 283 million tonnes. A further expansion to 353Mtpa is planned. Upgrades to the town’s power, water, sewerage and communications infrastructure will be a key feature of the development, in addition to “revitalising” the town centre, with two new buildings to be built.

Wickham will also benefit from the construction of two new parks, upgrades to existing parks and other community facilities, and the construction of about 200 high quality, motel-style accommodation units. Rio has also pledged to construct 212 company-owned houses in a new residential subdivision at Wickham South and provide a number of land lots for the local community, government, small businesses and contractors. The Julutharndu Maya building will house a 420-seat cafeteria available to all residents as well as a gymnasium, transit lounge and other facilities, while a 1600sq.m training and administration centre will be available for community use. Work is already underway and is scheduled for completion by mid-2015.

Rio Tinto Pilbara operations president Greg Lilleyman welcomed the state government’s approval for the expansion. “The approval is great news for the town of Wickham and the people of the Pilbara and demonstrates Rio Tinto’s long term commitment to investing in critical infrastructure for the region,” he said. Rio Tinto said sustainable development was a key feature of the residential subdivision design, with houses oriented for maximum energy efficiency and no obstruction to natural drainage pathways. While work is underway, the company has committed to an ongoing program of community engagement, including meeting with the Aboriginal Contractors Association to brief local people on contractor

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Focus on Rio Tinto’s Pilbara expansion opportunities and the supplier process. Open days are held every six months to keep locals up-to-date on the works. A monthly newsletter is delivered in town and bi-monthly meetings are held with major stakeholders. Rio is also operating an information line for locals with queries or comments. Rio Tinto iron ore accommodation and towns division manager Louise Thomas said around 150 people attended a Wickham community information day in the town hall at the start of May. She said: “We have about 2000 people in Wickham and we’ll be growing the town. It’s the first time since the town was built 40 years ago that there has been major expansion. On average, we have a community information day every six months. We’ve had a fantastic attendance – the hall’s been full. “Community engagement is very important to us. We are doing our best to make sure people get information about the expansion and have the opportunity to tell us what they think. I think people are excited to see things happening now. This is the first session where people can see things happening in the town. There is a general welcoming that we are spending $300 million – they’re pretty happy with that. “We are committed to keeping all our lines

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of engagement open. Everything we have been doing will continue.” Premier and State Development Minister Colin Barnett welcomed the project as an important investment by a major iron ore company in the future of the Pilbara and WA. “Rio Tinto’s investment will see Wickham’s

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population increase from about 2000 to more than 2600,” Barnett said. “Wickham will house the workforce necessary for Rio Tinto to reach its goal of increasing annual iron ore export capacity through Cape Lambert Port from the current 80Mt to a possible 183Mt in 2015.

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Focus on Rio Tinto’s Pilbara expansion “Rio Tinto’s commitment to Wickham will complement the government’s billion dollar Pilbara Cities initiative and help strengthen the Pilbara as a place to bring up families, with access to high standard services and facilities.” Barnett said the government approved a $43 million phase 1 project last year. “This included upgrades to the town’s wastewater and electricity infrastructure, and redevelopment of Wickham Lodge, providing accommodation and a high quality modern cafeteria for residents and FIFO employees, as well as a FIFO transit lounge, gymnasium and other facilities,” he said. “Rio Tinto is in the final stages of completing a new $22 million sport and recreation precinct, with high standard sporting and leisure facilities available for Wickham residents and teams from surrounding communities, and is revamping many of its existing houses. “Construction activity and the increased population will generate new opportunities for non-mining businesses and services, not only in Wickham, but in other communities in the Shire of Roebourne.” The Urban Development Institute of Australia congratulated Rio Tinto on its commitment to sustainability during the development.

UDIA chief executive officer Debra Goostrey said the project would help address critical housing shortages brought on by the resources boom and surging population in the Pilbara, which have created major challenges for the region’s existing infrastructure. “Not only does the project address regional housing shortages, it has broken new ground in sustainability,” she said.

“Rio Tinto’s commitment to Wickham will help strengthen the Pilbara as a place to bring up families.” – WA Premier Colin Barnett “This is an impressive achievement by Rio Tinto, a company better known for its expertise in mining than urban development. “Rio Tinto’s commitment to producing quality, sustainable housing for the Wickham community has really set new standards for what’s possible in remote mining communities.” Shire of Roebourne president and Wickham Community Association chairman

Fiona White-Hartig said: “In terms of the expansion, Rio Tinto has invested significant dollars into infrastructure in Wickham. We are very supportive of Rio Tinto’s moves to have 85 per cent residential workforce, rather than FIFO operational workforce. “We are not in favour of FIFO for an operational workforce. We want people to settle in the shire. “Part of the Pilbara city vision is that people reside in the shire and make it their home. From the Wickham Community Association’s point of view, we are all supportive of new infrastructure, because it’s necessary. “Rio Tinto just invested $23 million in the Wickham sports precinct and it’s a fantastic facility. That’s the kind of facility we need for people to want to stay in the town and raise their families here. Everyone is very supportive. “It’s essentially a Rio Tinto town – 85 per cent of the people in the town work for Rio Tinto. It was built as a mining town originally to support port operations. The planned expansion to the port will bring more investment in the region, both by Rio Tinto and contractor companies. It’s a very positive thing for the region – it gives surety that this is not a boom and bust situation. It shows they are investing in the town.” editorial@miningmonthly.com

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Focus on Tasmania’s migrating workforce

Tasmania holds the key There is no need to look overseas when skilled workers from Tasmania are ready to fill Australia’s skills gap. By Blake Wilshaw

I

ndustry groups are pushing for easier ways to attract foreign labour to meet Australian mining’s skills gap – but there could be a simpler option at home. As some the world’s established economies skip further into decline, the abundance of underemployed workers with skills applicable to resource sector construction work has provided Aussie mining operators with a decent pool of able bodies. As recently as April, federal Skills Minister Chris Evans announced a measure to attract skilled Americans to Australia to meet the growing resource sectors labour needs. In the past, 457 visas and marketing programs aimed at skilled Irish workers have helped fill the skills gap. But the gap remains huge.

According to latest figures from the Chamber of Minerals and Energy Western Australia and the Queensland Resources Council, WA’s resources sector is facing a shortfall of 33,000 skilled workers in the next 12 months while Queensland needs another 40,000 skilled people by 2020. Against this, the Tasmanian minerals sector has taken a hit in recent months. In February, BHP called time-out on its TEMCO manganese alloy smelter in Tasmania, due to low manganese prices. The long-term viability of the operation remains uncertain. Earlier this year, Bass Metals pulled the plug on its embattled Hellyer polymetallic tailings project, in Tasmania’s northwest, through fear of default on looming debt

repayments. For the redundant workers, fall-back careers in the pulp industry are tenuous, as pressure builds against a multibillion dollar mill development in the state’s north. One group with ties to the WA and Tasmanian resources sector said far-reaching solutions such as the American and Irish proposals overlooked the potential to find skilled workers at home. BLH Group state manager Western Australia Wayne Heal told Australia’s Mining Monthly employers should consider filling jobs with domestic workers first. “We’ve been around for quite some time and we’re headquartered in Tasmania, where there is a lot of mining operations are shutting down,” he said.

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Focus on Tasmania’s migrating workforce

Bass Metals’ Hellyer mill.

“Because of our long-standing history in Tasmania, we’ve been polling a lot of our workers as to whether they’d consider working in the northwest of Western Australia, where there is a severe shortage of labour. “The responses we’ve received have been overwhelming.” While the largest group is from Tasmania, Heal said BLH had about 1000 workers from all over Australia ready to be deployed. While it is not a revolutionary idea to go after staff in other states, how Heal proposes getting these people to work in WA could be. His method is to aggregate a large group of workers for periods when labour requirements are highest, such as during construction of major projects. “The key is to provide them ‘in bulk’ with transport and working permits all arranged prior to leaving their home states,” he said. “The reason we do that is it gives us more leverage when discussing labour requirements with the large iron ore producers. “By that, I mean we can negotiate for the safest environment, the best rosters, the best onsite facilities and the best pay rates for our staff.” This “aggregation” is simply about workers from the east coast becoming more mobile. “We’ve gone so far as to align ourselves with a charter aviation company, so we can deliver them pretty much anywhere there’s a 1700m runway,” Heal said. There have been many instances of skilled and unskilled workers from the Eastern States and New Zealand moving to WA thinking it’s open season for high-paying resources jobs. In reality, there are permits and tests and skill sets that must be met before you are even considered for work. “Our workers have gone through this process and all have resource sector experience,” Heal said. “The Western Australian economy is doing so well; why not spread some of the wealth to the rest of the country before targeting workers from overseas?” editorial@miningmonthly.com

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JUNE 2012 amm


Focus on Dart Mining, Victoria

Embracing the unicorn Dart Mining has it all on its doorstep. By Kristie Batten

W

hile some may argue that the picturesque foothills of the Snowy Mountains are not an ideal place for a mine, Dart Mining says the location of its flagship project is its key advantage. Dart’s Unicorn molybdenum project is just 30km from the Victorian town of Corryong, famous for being the home – and final resting place – of Jack Riley, who was the subject of Banjo Paterson’s legendary poem The Man from Snowy River. Just nearby are the hydroelectric power stations, built as part of the Snowy Mountains scheme in the 1970s. Dart chief executive officer Lindsay Ward said the local residents were comfortable with large projects and were supportive of its presence in the area. “They don’t fear it because they understand it,” he said. Dart has fully engaged with the Corryong locals and a community meeting last August attracted 10% of the town’s population, who have shown overwhelming support for the project. Being so close to the town presents another advantage for the company in terms of recruiting a workforce. If and when Unicorn is developed, the operation would be completely residential, sourcing workers from nearby towns, which would eliminate the need for a fly-in, fly-out component, boosting the economy of the local area.

Ward said it was important to Dart to keep as much money as possible in the area. The company tries to buy locally, wherever possible, and has even held its board meetings in Corryong. According to Ward, another advantage of a local workforce was that Dart wouldn’t be forced to pay the often inflated wages seen in more competitive skills markets, keeping costs down. It also eliminated the need to build camp infrastructure or an airstrip. In fact, the project is facing very little logistical costs with power, water and roads all in place. Product from Unicorn would be trucked to Albury in containers and railed to Melbourne for shipment. Ward said the infrastructure and logistics already in place could save the company as much as $350 million in capital costs. While it’s early days, he expects Unicorn to have capital costs of around $250-300 million. Dart was initially focused on exploring for gold at Unicorn but has been excited by what its found at the project, which remains underexplored. “You don’t find new porphyry provinces every day – particularly not in Australia,” Ward said. “The gold has been interesting but not as rewarding as we’d liked. Molybdenum is the real economic driver of the project.” In October, Dart announced an indicated and inferred resource of 105 million tonnes at

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400 parts per million molybdenum, 570ppm copper and 2.7 grams per tonne silver – or 0.07% molybdenum equivalent. The resource extended to a depth of 450m and remains open. Ward said there was known mineralisation to at least 650m depth. Ward and the Dart team are particularly excited about the style of mineralisation at Unicorn, which has similarities to the worldclass, long-life Henderson molybdenum mine in Colorado. If those similarities continue, the deposit is set to get substantially larger the deeper the company drills.

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Focus on Dart Mining, Victoria “With depth I think we will see more tonnes, more grade but it is yet to be tested,” Ward said. With $4.1 million in the bank in mid-April, Dart is fully funded to complete its program of work at Unicorn this year. A 15-hole reverse circulation program is underway to convert the 29Mt indicated portion of the resource to measured, as well as upgrading overall numbers, followed by a phase two program to firm up inferred resources. The third phase later this year will test the deposit at depth. Meanwhile, a scoping study is in its early stages for completion late in the September quarter. “Hopefully around July we’ll have the updated resource which will feed into the scoping study,” Ward said. Based on the current resource, a 5Mt per annum operation would give the company a 20-year mining life. Following the release of the maiden resource, the company immediately began metallurgical testwork, which indicated recoveries of up to 92.3% for molybdenum, 96.1% copper and 82.6% for silver. Ward said it was important to do metallurgical work early to see if the company had a recoverable resource. “Recoveries are fantastic,” he said.

Drill cores from Unicorn.

In addition to a molybdenum concentrate, the project would also produce a separate copper-silver concentrate. Another factor that works in Dart’s favour is the expected low strip ratio. “If you look at the strip ratio, the economics start changing,” Ward said. The strip ratio is expected to be just 0.3:1, with mineralisation outcrops starting at the surface. Ward said a strip ratio like that would equate to mining costs of around $2.50 per tonne. Mining would be via open pit, but ore would be mined in benches and trucked a

short distance to twin raisebored orepasses, to be sent to the bottom of a 1km decline for loading and trucking to the processing plant. “We’re looking to have an open cut mine that’s using a lot of underground technology,” Ward said. Ward said the Victorian government had been supportive and the project was on unrestricted crown land with no known native title, flora or fauna issues. “The Victorian government is starting to recognise that base metals are the future of the industry,” he said. editorial@miningmonthly.com

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News

Mine myths revealed A new website separates myth from fact about the New South Wales mining industry. By Vetti Kakulas

T

he NSW Minerals Council says getting the facts right is the first step towards a sustainable land use policy in NSW. NSWMC chief executive officer Stephen Galilee said www.landusefacts.com.au was launched “in response to misinformation that is out there about mining and the state’s land use”. Mining operations account for 0.1% of NSW land, which is small compared to 76% for agriculture, 3.7% for forestry and 1.8% for urban and rural residential in the state. It is forbidden to mine in NSW national parks, which make up 7.6% of the state. “Most significantly, mining and minerals processing generates approximately 93,000 direct jobs across New South Wales and supports an additional 325,000 jobs indirectly,” Galilee said.

amm JUNE 2012

NSWMC says the website also explains the misinformation being spread about the NSW government’s new strategic regional land use policy. “The state’s minerals industry has consistently advocated a fact-based approach to planning and land use,” Galilee said. “The website has been designed to encourage discussions regarding these mining facts. “We have maintained a good working relationship with the agricultural sector over many years. These land use plans should not be about choosing between one industry or another. All industries should be able to co-exist and prosper.” One of the myths described on the website is that mining operations have spread rapidly throughout NSW over the last decade. The website says the total number of coal mines in NSW has increased by three in the

A screenshot of the land use facts website.

past seven years. In 2005, there were 58 coal mines. There are now 61. Another busted myth is that land which has been mined cannot be rehabilitated. The website says former mines have been successfully rehabilitated to create forests, parks and farmland. vetti.kakulas@aspermont.com

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QME Expo Preview

Happy anniversary, QME The Queensland Mining & Engineering exhibition is fast approaching, returning to Mackay Showgrounds from July 24-26. By Vetti Kakulas

T

his year’s QME will be the biggest ever, with 650 exhibitors – 150 more than the 2010 event. Held every two years, the expo was first held ten years ago. The 2012 expo will feature more stands, products and plenty of up-to-date information on the mining industry. Reed Mining Events director Paul Baker said a combination of factors was driving interest in this event.

Reed suggests people planning to attend the event book accommodation as soon as possible. “With ongoing growth and investment in the central Queensland coalfields, there is an increased demand for equipment, services and support packages from suppliers and contractors throughout the mining industry,” he said. “That is contributing to very strong interest in this year’s exhibition – as of late February, over 90 per cent of the show space has been

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allocated and very soon we expect QME 2012 will be sold out.” Other QME events will be held at the Mackay Entertainment & Convention Centre. At the last QME expo, more than 10,000 mining professionals attended. Event organiser Reed Exhibitions expects 2012 to be just as popular, especially with the strong growth in the central Queensland mining sector. This year’s expo layout has been expanded to allow for growth. The redesigned layout includes an additional 2500 square metres. Reed will introduce a recruitment area for people who are interested in a career in the mining industry. “QME 2012 will incorporate the QME Community Hub – which will involve community-based organisations such as the Mater Foundation and Mining Family Matters – around which these programs and initiatives will be based,” Baker said. A range of mining community-focused events and information sessions will be featured throughout the expo. Features include a Women in Mining day, a career and recruitment program, and a health and welfare session for fly-in, fly-out and drive-in, drive-out miners.

“Mining has moved on from being a ‘men-only’ industry and it has recognised that it needs to engage with people across the community,” Baker said. “Not only those currently involved, but those looking at job opportunities, which will allow the industry to grow and prosper in years to come.” Due to the size and interest of the expo, Reed suggests people planning to attend the event book accommodation as soon as possible. QME registrations are now open. Visitors can register by logging on to: www. queenslandminingexpo.com.au. Other Reed events held this year include the Mining & Engineering expo in Newcastle from August 28-30 and the Goldfields Mining Expo in Kalgoorlie from October 30 to November 1. vetti.kakulas@aspermont.com

JUNE 2012 amm


QME Expo Preview

Intelligent, innovative rigs ITALIAN made Comacchio exploration drilling rigs will be unveiled by Australian firm Drilltechniques at this year’s QME. The Brisbane-based firm is the authorised Australian distributor of the rigs for the mineral exploration market. Sales and business development manager Chris Logan said the truck and track mounted machines combined Italian innovation and precision with Australian drilling methodology and practicality. “The key benefit for Comacchio owners is the intelligence and innovation inside each machine,” Logan said. “Comacchio has a unique and pragmatic way of engineering reliability and efficiency into its designs.” Sydney-based drilling contractor Drillsearch Australia has made a significant investment in four of Comacchio’s configured MC 450P.1 track-mounted machines, prior to their launch. This included Drillsearch’s input into the design and configuration of the new drills.

Two of the new Drillsearch machines are operating in western Queensland, performing a variety of work, including rotary air drilling down to a depth of 240m, in addition to HQ wireline coring to depths of 240m. Logan believes the rigs are also capable of much greater depths. “Drillsearch has been impressed with the machines’ reliability and performance to date,” he said. “There is no doubt that giving the customer the opportunity to contribute to the design and configuration of the machines has resulted in them fitting perfectly into Drillsearch’s operations.” The other two Drillsearch machines will arrive in Brisbane in June. Resource contractor Nitro Drilling is awaiting the delivery of three custom built Comacchio MC-T20EX mineral exploration rigs, the largest truck mounted rig Comacchio has ever produced. The MC-T20EX is designed for a Mercedes Actros 8X8 and a Sullair 1100/350 drill kit.

Drilltechniques distributes Comacchio drilling rigs to the Australian mining market.

The machines meet Australia’s mining regulations. brooke.showers@aspermont.com

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QME Expo Preview

Women’s day at QME QME will devote a day to women, focusing on their role in the mining industry. By Brooke Showers

Q

ME is holding a Women in Mining Day at this year’s expo, to highlight the vital role women play in the industry. The Women in Mining Day will include special presentations and allow female miners to share their experiences. QME is running the event in recognition of the growing number of women who participate in Queensland’s mining industry. “Women are playing an increasingly important role in the mining industry, not only in Queensland, but around Australia and the world,” QME exhibition director Paul Baker said. Baker said women made up a major, expanding part of the industry in a variety of roles, from operators and technicians to pit managers and engineers. “Their participation in the mining industry is only going to increase, as mines, suppliers and service providers look to attract new entrants in the face of looming skills shortages,” he said. “We want to ensure all women involved in the central Queensland mining industry – or seeking to join the industry – see QME as an important event. They can learn more about key issues and developments impacting on their careers, along with making new connections in the industry.”

“This initiative is part of a broad strategy on the part of Reed Mining Events to increase the attractiveness of our events to the broadest possible range of the mining community.” – QME exhibition director Paul Baker Women hoping to enter Queensland’s surging mining sector are being urged to attend to learn more about mining employment prospects from those already working in the industry. QME will also be working with various educational institutions to encourage young women to consider mining as a career path. Reed Mining Events also owns and operates mining and engineering exhibitions in New South Wales, Western Australia and Indonesia. Its first Women in Mining Day was at the Asia-Pacific’s International Mining Exhibition in Sydney last year. “This initiative is part of a broad strategy on the part of Reed Mining Events to increase the attractiveness of our events to the broadest possible range of the mining community,” Baker said. “From frontline operators, maintenance crews and supervisors, technical and scientific personnel up to the highest level of management.” The organisers are developing more initiatives to promote and foster the role of women, to be announced closer to the time of the expo. The Women in Mining Day will be held on day two of the QME expo on Wednesday, July 25. brooke.showers@aspermont.com

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QME Expo Preview

Bright ideas from Redstar INDUSTRIAL products distributor Redstar Equipment will showcase its range of generators, welders, compressors and fuel tanks at this year’s QME. Redstar, based in Brisbane and Perth, is the exclusive Denyo generator supplier for Australia. Its stand will feature products in the Denyo range for industrial mobile and prime fixed applications. Redstar can supply generators for all applications to meet any specifications ranging from 6 KVA to more than 3250 KVA. Other equipment distributed by Redstar on show at QME will include industrial diesel welders, compressors and fuel tanks. Redstar offers welding accessories such as welding lead sets, wirefeeders and custom designed welding trailers to suit any application for mining or contracting work. The range of industrial single and dual

operator diesel welders very from 30 to 500 amps. Diesel air compressors with up to 1850 cubic feet per minute capacity are available and Redstar’s diesel lighting towers range from four to six heads. All of Redstar’s products have fuel efficient options and are targeted at specialised industrial use Australia-wide. Redstar says it offers a complete service solution, including fabrication, equipment customisation and specialist components, plus support ranging from scheduled service and maintenance to engine replacement. Equipped with spare parts, service vehicles and technicians, Redstar is able to respond to customer emergency breakdowns and repairs around the clock, every day of the year. To help customers make the right choice, the company also aims to provide informed choices and share technical knowledge with its clients. brooke.showers@aspermont.com

Redstar supplies Denyo generators exclusively to the Australian market.

E QM12

Come see what’s new at AllightSykes

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Visit us at Stand 8052 To experience our full range of products such as Allight Lighting Towers, Sykes Pumps, Perkins Engines, FG Wilson Generators and Rotair Compressors, visit us at QME 2012

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QME Expo Preview

Analyse this IndustrIal information solutions specialist Vrt systems will be promoting its latest power quality analyser at QME. The CEt PMC-680i is a monitor designed with a high-resolution, industrial-grade, colour liquid crystal display. It can be used on applications such as generation plants, high voltage transmission networks, round-the-clock automated manufacturing facilities and data centres, as well as distribution substations at heavy industry plants and mines. The PMC-680i has a range of communication options including dual ethernet and rs-485 ports. It features eight gigabytes of internal memory, eight data input and output connections and GPs time memory synchronisation. �These features make the PMC-680i one of the most advanced power quality monitors available for power-sensitive industries,� Vrt systems sales manager dennis Henry said. The analyser complies with industry standards including IEC 6205322 Class 0.25, IEC 61000-4-7, IEC 61000-4-15 and IEC 61000-4-30. Vrt systems will also use QME to promote its sustainable initiatives, including systems to manage performance of electrical supplies, energy efficiency and carbon footprint audits, and water, air, gas, electricity and steam monitoring and management software. In addition, Vrt systems will launch the CEt PMC-330 digital threephase energy meter, designed for the low voltage power and energy metering markets. vetti.kakulas@aspermont.com

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PMC-680i quality analyser.

JUNE 2012 amm


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• Modular hydraulic package (uncouple the whole pod and replace) • 24 volt LED low voltage lights that have a life span of 50,000 hrs and can be repaired under the SX LED Exchange Program.

The Southern Cross LED Lighting Towers are COMPLETE EXTRA LOW VOLTAGE Unit with absolutely no high voltage in any part of the units electrical system. Full range of spare parts available 24hrs a day through our spare parts department or our online catalogue - “Mine Find”


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Southern Cross Wholesale Parts was established with the aim of sourcing and supplying high quality, cost effective auto electrical parts predominantly to the mining, earthmoving, construction and farming equipment sectors. The southern Cross wholesale Parts division is supported by the knowledge and technical ability of the large field service teams working throughout the region.

Expertise in LED lighting, Collision Avoidance/Proximity Detection and Fleet Management Systems are at the forefront of technical solutions supported by highly qualified and experienced tradesmen. The Southern Cross Technical Services team have experience working on all major OEM machines including Caterpillar, Komatsu, Hitachi, Terex and Liebherr.

It is this technical knowledge and the “on-site” ability, that supports all part sales which makes the difference to our valued customers. Southern Cross is the sole distributor of the SX brands, including the latest LED lighting technology.

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 AUTO ELECTRICAL The Southern Cross Auto Electrical team has unparalleled experience in providing auto electrical services to the mining and resource industries throughout the region utilising a fully equipped fleet of service vehicles. Each service unit carries an extensive range of auto electrical and air conditioning service parts and operates 24 hours a day 7 days a week. The service teams specialise in repairs, maintenance and servicing to the mining and resource industries, while also providing the same level of attention to earthmoving, farming and other heavy industrial sectors. These services can be provided in our workshop or on-site with a focus on minimising downtime. All technical personnel have the training, inductions and accreditations to visit any location within the district and while in support of the Groups other technical business units, can be stationed anywhere in Australia.

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QME Expo Preview

Hyundai R1200-9 excavator.

Hyundai’s biggest yet

Visitors to QME will get a look at Hyundai’s largest excavator, the R1200-9. By Vetti Kakulas

H

yundai Construction Equipment Australia has launched its largest excavator and will be displaying it at QME. The 120 tonne R1200-9 crawler excavator is an addition to the Hyundai Dash 9 series. It has been designed to maximise fuel efficiency – Hyundai claims users can expect fuel benefits of 25%. It features the Hi-Mate system, which uses GPS-satellite technology. Hi-Mate enables fleet managers to remotely check from their computer or mobile phone the machine’s performance, including diagnostic information and location.

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The R1200-9 uses a 23 litre Cummins QSK23 diesel engine rated at 567 kilowatts, this is electronically controlled for optimum fuel-to-air ration. It is capable of loading a Caterpillar 775 dump truck in six passes and has a dig depth of 8 metres, a digging height of 12.42m and a dump height of 7.79m. The Robex 1200-9 design introduces a patented hydraulic control and an improved control valve for smoother operation. Inside, there is an air-conditioning system, a sun visor and radio player with USB connection. The cabin seat, console and armrest can all be adjusted for operator

comfort. The R1200-9 cab, encased in steel tubing, has been enlarged with improved visibility, including a see-through skylight and scratch-proof safety glass windows on all sides. There is a colour LCD display with digital gauges for hydraulic oil temperature, water temperature and fuel. The R1200-9 has three power modes: power, standard and economy, as well as user mode for operator preference. Other features include a rear-view camera monitor and an anti-theft system which asks for a password. vetti.kakulas@aspermont.com

JUNE 2012 AMM


Come and meet representatives from the Global Schenck Process business at our stand at MINExpo International, Las Vegas, 24th to 26th September

Meet the big brother of banana screens At 4.9 x 9.7m, anything else is a compromise

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Schenck Process Australia Pty Ltd Ground Floor 65 Epping Road North Ryde NSW 2113, Australia T 1300 551 645 Australia wide T + 61 2 9886 6800 outside of Australia sales@schenckprocess.com.au www.schenckprocess.com.au

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developed based on customer feedback Anything else is a compromise We’ve listened to your feedback, you’re looking for a larger screen. You want more throughput capacity with room to grow. We took your feedback to our engineers in Sydney and our manufacturing facility in Perth. The result, Australia’s largest single-deck screen a 4.9m x 9.7m is now a thumping reality.


QME Expo Preview A. Noble & Son’s smartphone app is designed for the lifting industry.

A noble invention

A new smartphone application allows crane riggers to access technical data instantly.

A

mining equipment supplier has created a clever application that allows crane operators and riggers to access technical data on their mobile smartphones. A. Noble & Son will launch a free-to-download app designed for workers searching for working load limits relating to wire, chain and synthetic slings. Nobles was established in Adelaide in 1911 and now has branches across Australia. The mobile phone app is a modern version of the company’s pocketsized Riggers Handbook. The blue handbook was launched in 1980 and is still widely used today. App users can search data tables for common pieces of rigging equipment, such as eyebolts. “Recently, end users have been telling us as more and more people are using smartphones, they are looking for ways to use these devices to help them on site,” Nobles managing director Angelo Primavera said. “Based on this feedback, we decided to develop this app to give endusers a convenient way of having this important information in their pocket, without having to carry bulky pocket cards and reference books or worry about information becoming out of date.” The app is designed specifically to contain information relevant to Australian standards. It has already been downloaded by more than 4000 Android and Apple smartphone users. For iPhones, the app can be downloaded from the Apple website or from iTunes. Other mining related apps have been developed for iPads and iPhones, including mine and plant maintenance software, allowing the user to retrieve and send work orders. Additionally, an app has been designed for workers to manage their fly-in, fly-out travel schedule using their smartphones. vetti.kakulas@aspermont.com

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ASX Update NEW LISTINGS APRIL 20

Breaker Resources

Code: BRB Principal activities: Gold exploration Opening price: 20c

MAY 1

Merah Resources Limited

Code: MEH Principal activities: Mineral exploration for gold and base metals in Western Australia Opening price: 22c

MAY 3

Eumeralla Resources Limited Code: EUM Principal activities: Exploration Opening price: 23c

MAY 5

Cuesta Coal Limited

Code: CQC Principal activities:Coal exploration and development in Queensland. Opening price: 17.5c

MAY 9

Estrella Resources Limited

Code: ESR Principal activities: Gold-copper exploration in Chile Opening price: 16c

FORTHCOMING FLOATS MAY 21

Gossan Hill Gold Limited

Proposed code: GOS Principal activities: Gold exploration Issue price: 20c

Corporate: Andrew White (executive chairman); Leon Pretorius (non-executive director); Robert Waring (non-executive director and company secretary); Andrew Morgan (non-executive director) 612 411 110 513 www.gossanhillgold.com.au

MAY 23

Bannon Limited

Proposed code: BNX Principal activities: Exploration of gold, base metals and magmatic nickel-copper-platinum group metal mineralisation Issue price: 20c Corporate: Peter Pawlowitsch (director); Daniel Schwann (director); Philip Werrett (director) 08 9486 8237 www.bannonlimited.com.au

JUNE 14

Newfield Resources Limited

Proposed code: NWF Principal activities: Tenement holdings in WA Issue price: 20c Corporate: Anthony Ho (executive director); Murray Kornweibel (non-executive director); Sanny Nanang (non-executive director); Giap Ch’ng Ooi (non-executive director) 08 6389 2688 www.newfieldresources.com.au

JUNE 19

Swift Resources Limited

Proposed code: SWI Principal activities: Evaluating acquisitions in resource sector Issue price: 20c Corporate: Guan Huat Sunny Loh (managing director and chairman); Peter Thompson (non-executive director); Ivan Perry Wu (executive director) 08 9322 2700 www.swiftresources.com.au

JUNE 25

Equamineral Holdings Limited

Proposed code: EQH Principal activities: Iron exploration Issue price: 20c Corporate: Colin Ikin (executive chairman); Robert Timmins (non-executive director); David Porter (non-executive director) 08 6141 3500 www.equamineral.com

JUNE 29

Red Cat Minerals

Proposed code: RCC Principal activities: Gold exploration Issue price: 20c Corporate: Lee Christensen (non-executive chairman); Christophe Stimbre (managing director); Stephen Stone (non-executive director) 08 9322 2700 www.redcatminerals.com

TO BE ADVISED

Aperio Resources Austrasia International Mining Limited Bimini Resources Limited Boadicea Resources Limited Bora Bora Resources Limited Crest Minerals Limited Federation Metals NL Messina Resources

APPLICATION WITHDRAWN

888 Resources Klondyke Gold Limited Walla Mines Limited Yulleba Resources Limited

Listings updated as of May 9

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Multiple choices (and answers).

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JUNE 2012 AMM


Fitting giant Off the Road tyres isn’t a job for any ordinary Joe

Joe Ruig has been fitting Bridgestone Earthmover Tyres for over 30 years and like the rest of our 80 plus national tyre fitting team, he has been trained beyond national standards. Bridgestone Earthmover Tyres staff work on controlling the risks involved in the servicing, maintenance, fitting, inspection and repair of Off the Road tyres and wheel assemblies.

Our safety procedures exceed industry standards and our equipment is modern and developed to ensure fit for purpose. So when tyre and wheel servicing is required for off the road applications, don’t rely any ordinary “Joe”, rely on the company with the experience and the resource to do it first time every time. Bridgestone Earthmover Tyres

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Focus on copper

Copper outlook: uncertain As copper supply growth increases, experts predict a global surplus by 2014 and warn of pricing volatility. By Matthew Ogg

W

hile disruptions have often kept copper supply short of forecast production rates, even sceptics are betting on the demand gap closing over the coming years. Goldman Sachs senior commodities economist Allison Nathan says she has been “consistently disappointed” with copper mine growth since the late 1990s but she tentatively thinks the supply response is on its way. “Even if you start haircutting and assuming that you’re pushing back start-ups and you’re slowing the pace of ramp-ups, we think it’s going to be difficult to avoid more of a surplus, certainly by 2014 and potentially before that,” she says. “We don’t think this should be a game

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changer in the next 12 months. But as we look ahead, we do think the game-changer status might begin to take hold. “From our perspective, it potentially lowers the upside potential for copper prices – it provides some moderate downside to the levels that we seem to be settling at in the $US8000-9000 range right now.” Despite the overall positive outlook for supply, Paul Settles, principal consultant at commodities analysts CRU, warns to expect more industrial unrest over the next three years as labour contracts come up for renewal. “The price is high, people know it’s high and they want some of the action, so that helps in there being more strikes,” he says. “There are a lot of contracts trickling in, but there are a lot of peaks there in Q4 2012.

“We’ve got six contracts coming up – these are mostly in Chile and Peru at Andina, El Soldado, Los Bronces and Toquepala.” Settles estimates disruptions accounted for 200,000 tonnes worth of lost production last year. Allison Nathan says if Freeport McMoRan’s Grasberg mine in Indonesia and BHP’s Escondida are not taken into account, world mine supply was up by more than 400,000t year-on-year in the second half of 2011. “Of course we could say that Escondida and Grasberg are one-offs but there tends to be a lot of one-offs on a consistent basis,” she says. “Nevertheless, we are seeing quite a meaningful growth out of the rest of the industry – we do have meaningful on-paper

JUNE 2012 amm


Focus on copper supply growth anticipated for this year and we’ve got 650,000 tonnes versus virtually no mine supply growth last year. “Given uncertainty and timing, certainly there could be some shifts and some disruption into 2013, but ultimately it’s on its way.” She points out that Chile and Peru, which account for up to half of global copper production, had supply that was down 5.8% year-on-year in January and February. Goldman Sachs’ forecasts include a disruption allowance of 900,000t for 2012, but for January and February, disruptions had already dented that figure by 380,000t.

World Bank’s China 2030 report expects its economic growth to slow to less than 6% in 2026-30. Provided supply growth is able to overcome the hurdles of delays, strikes, labour cost inflation, rising energy costs and tighter water controls, there is still the issue of how much copper the world will buy. CRU expects 95% of increased copper

demand to come from China in 2012 while the World Bank’s recent China 2030 report expects that country’s economic growth to slow to less than 6% in 2026-30. Anglo American chief economist Robert Lind says: “From my perspective, one of the most important messages that we are going to have to learn to live with is that China is growing at a slower rate than we’ve got used to over the last decade. “Some people might see that as a risk but I see it as an opportunity, because it will be accompanied by a necessary rebalancing away from investment towards consumption. “Even with that slowdown, China will remain a very big economy and it will increasingly get richer and it will remain one of the biggest consumers of the commodities that we produce.” Rio Tinto copper division chief executive officer Andrew Harding agrees that China’s

copper demand future remains strong despite expected slower economic growth rates. “We expect long-term growth will continue to be driven by urbanisation and industrialisation in China, with growth primarily in the areas of power, power infrastructure and construction,” he says. “The construction of social housing is also lending itself to a copper-intensive period – 10 million social houses were built over the last 18 months. The next stage is occupancy copper demand as these dwellings are fitted out.” While the long-term prospects are optimistic, Harding forecasts continued copper price volatility over the next 12 months. “The question for us and the industry is how to manage that volatility in the short term, whilst preserving long-term value,” he added. editorial@miningmonthly.com

Introducing Goulds XHD.

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Slurry pump downtime can cost a mine $60,000 or more in lost production— per hour. But given the unreliability of today’s pumps—many were designed more than 20 years ago—there hasn’t been much you could do about it. Until now. Because the new Goulds XHD offers more reliability features than any slurry pump you can buy. Including CFD hydraulic design that reduces wear in all key areas, thereby extending the life of the pump and reducing downtime. The XHD even features i-ALERT™ condition monitoring, plus a host of servicing time-savers, to get you back up and running fast. Call 1-800-734-7867 or visit ittmining.com today.

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News

Super software company Software giant Gemcom has been taken over by Dassault Systèmes. By Brooke Showers

O

ne of the largest software providers in the mining industry has been snapped up for $354 million. Mining software specialist Gemcom Software International has been taken over by French 3D design software giant Dassault Systèmes. Gemcom’s products will be incorporated into a new brand called Geovia. Vancouver-based Gemcom produces geological modelling and simulation solutions for the mining industry. It has quickly expanded its customer base on the back of global mining growth. “With the acquisition of Gemcom, coupled with our three dimensional experience platform capabilities, our objective is to model and simulate our plant, improving predictability, efficiency, safety and sustainability within the natural resource

industry and beyond,” Dassault Systèmes president and chief executive officer Bernard Charles said. Geovia products will target raw material provisioning and long term resource availability. Charles said the acquisition would benefit Gemcom’s customer base by bringing global support and enterprise collaboration. “Advanced technologies will not only enable engineers and geologists to model and visualise resources, but also improve sustainable mine productivity,” Gemcom president and CEO Rick Moignard said. “We believe that with Dassault Systèmes support we will be able to address global issues for our customers as a real partner. “None of our competitors can match that in the industry.” When the acquisition of Gemcom is completed, expected to be in July, Moignard

Gemcom’s detailed schedule progressing.

will become the CEO of the Geovia brand. Dassault Systèmes has 124 offices globally across 27 countries. In Australia, it has offices in Sydney and Melbourne. Dassault Systèmes said Gemcom’s 360 employees and management team would remain in place and continue servicing the mining industry. brooke.showers@aspermont.com

Published by

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To subscribe to any of the specified publications, visit www.industry-news.net/subscribe For advertising opportunities: T: 08 6263 9100 E: advertising@miningnews.net

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News

Welcome back Thanks to its success, AIMEX is returning sooner than expected.

T

he Asia-Pacific region’s largest mining exhibition will return to Sydney next year, two years earlier than planned. The Asia-Pacific’s International Mining Exhibition is scheduled to return to Sydney Olympic Park from August 20-23, 2013. AIMEX is an internationally recognised expo showcasing the latest mining technology, equipment and services. The expo, which was previously held every four years, has become a biennial event due to demand from the industry requesting an earlier show. “According to suppliers and senior managers in Australia’s mining industry, there are compelling reasons for this industryleading exhibition to be held on a twoyear cycle,” Reed Mining Events exhibition director Paul Baker said. Baker said it was important for mining companies to be kept up-to-date with the

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latest trends and developments in equipment. “There is also the fast-changing nature of the industry and technology, along with large numbers of newcomers to the industry who find an event such as AIMEX an ideal way to learn a lot about the industry in a concentrated time and location.” The event offers visitors and exhibitors a chance to network and conduct business with other industry colleagues. Additionally, AIMEX offers a range of educational programs and events, including themed days and guest speakers from the industry discussing mine related topics. The previous AIMEX event in September 2011 attracted more than 17,300 visitors and 638 exhibitors. It was spread over 40,000 square metres of space at Olympic Park. Baker said the industry overwhelmingly rated AIMEX as the leading mining exhibition for the Asia-Pacific region. “Furthermore, the

exhibition generated unprecedented levels of satisfaction from participants, with 78 per cent of exhibitors and 88 per cent of visitors very or completely satisfied.” Reed Mining Events has compiled research and found 86% of exhibitors and 95% of senior managers were interested in participating in AIMEX 2013. Other leading mining expos such as Electra Mining Africa and Chile Expomin are held every two years. “Both these events will have their current editions in 2012, putting AIMEX 2013 and beyond in perfect sync with them and creating ideal opportunities for international visitors and exhibitors,” Baker said. Exhibition sales for AIMEX will open in mid-June, 2013. In 2007 the Exhibition and Event Association of Australasia awarded AIMEX best trade show over 10,000sq.m. vetti.kakulas@aspermont.com

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Motors & Drives

Top grade upgrade An automation specialist has upgraded vital systems at an open-cut mine. By Vetti Kakulas

V

ictoria’s largest energy producer has redesigned the coal conveyor drive system at its mine. Loy Yang Power and Rockwell Automation joined forces to upgrade the 25km long conveyors at the Loy Yang coal mine. The system transports coal from the mine floor to the surface. Located near Traralgon, in southeast Victoria, the mine produces about one third of Victoria’s electricity requirements. Providing coal feedstock to the coal bunker is essential in maintaining the power generation process online. “The coal bunker only has enough capacity to fuel 20 hours of power generation. Therefore, the pressure on the conveying system to perform is relentless,” Loy Yang mine senior electrical engineer Steve Cleaver said. Prior to this upgrade, the transfer conveyor

drive systems at Loy Yang mine were struggling to meet demands and the drive cooling systems were repeatedly overheating. “Our legacy drive system had served us well over the years, but it was time for a more reliable system with advanced capabilities,” Cleaver said. “With so many conveyors on-site, it was important that the new drive technology could be brought online gradually and was able to integrate with our existing drive systems and control architecture.” The plan was to design a drive solution capable of withstanding the rugged mining environment and to deliver a non-stop efficient conveyor system. The Loy Yang Power and Rockwell Automation engineering team together developed a drive solution founded on the Allen-Bradley PowerFlex 7000 medium voltage AC drive. The Powerflex 7000 has

Direct-to-Drive technology, which helps eliminate the need for isolation transformers on a range of motor applications. Rockwell said the technology provided space-efficient speed and torque control across a range of demanding drive applications. The engineering team have equipped each conveyor with a fully self-contained, cooled and removable drive package. This drive package can be installed and uninstalled on any of the conveyors at the Loy Yang mine. Rockwell Automation technical consultant Gary Spotswood said the compact nature of the PowerFlex 7000 drive simplified the development of the portable drive packages. “The transformer-less configuration of the PowerFlex 7000 meant we were able to help minimise the footprint of the drive package,” he said. vetti.kakulas@aspermont.com

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SEW-Eurodrive’s latest range of industrial gear units has been dubbed the X-Series.

Gears have X-factor One of Asia-Pacific’s largest providers of motor and drive solutions has released its latest range of industrial gear units. By Vetti Kakulas

P

ower transmission systems and motor control electronics designer SEW-Eurodrive has released its latest range of industrial motor drives, the X-Series. “This series boasts the finest torque graduation on the market, allowing users to closely match an X-Series gear unit to their application,” SEW-Eurodrive industrial gears national product manager Ian Tribe said. The X-Series is designed with a robust housing with a graduated size, variable installation and a variety of modular options to suit helical and bevel-helical gear unit. SEW-Eurodrive says an advantage of the

JUNE 2012 AMM

74 NEPTUNE-Australia's Mining Monthly.indd 1

X-Series is its reduced costs and weight, due to its high power density and sizes. The hallmark red chassis gear units are available in 15 different sizes. X-Series modular options available include motor adapters and mounting flanges, backstops and cooling systems. Sealing systems are available for varied environmental conditions, and a cooling system is provided. The X-series can be adjusted to suit different applications, including conveyor systems and ball mills. Clockwise and counter-clockwise versions can be implemented into the X-Series single gear unit.

4/24/12 7:30 PM


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Motors & Drives SEW-Eurodrive’s industrial gear units can be used for driving conveyor belts and bucket elevators for horizontal and vertical transport of bulk material and packages. X-Series can run the travel and hoist drive on cranes or with reinforced bearings for mixers and agitators. The industrial gear units have been used in the chemicals, food, environmental, wood, paper, plastic and steel industries. The high power density of the X-Series gear unit range makes them suitable for a range of mining applications. “Our gear units deliver extremely compact and versatile drive options for Australia’s natural resources and heavy engineering industries,” Tribe said. “The X-Series’ ability to withstand harsh operating environments makes our motor and drive solutions suitable for Australia’s mineral and ore bulk-handling and processing operations.” SEW-Eurodrive can design drive packages to complement the industrial gear units, including a motor, couplings, brakes and steel frames. “One thing our customers do not want is to have to go from supplier to supplier to order each component,” Tribe said, “We engineer and assemble complete drive assemblies in order to provide ease-ofordering and an efficient end system.”

X-Series units are designed to withstand harsh operating environments.

The X-Series includes a bucket elevator drive, which SEW-Eurodrive says is based on the basic gear unit. This is suitable for conveyor systems transporting bulk materials vertically, which require more power. The bucket elevator has a mounted auxiliary drive and is supplied in an empty or full bucket design to ensure all drive components are matched to each application.

SEW-Eurodrive distributes worldwide and delivers standard version products and spare parts to companies. Establishing in 1931, SEW-Eurodrive is based in Bruchsal, Germany. The Australian division is in Tullamarine, Melbourne, and was founded in 1982. vetti.kakulas@aspermont.com

WE ARE NOW IN A POSITION TO TAKE YOUR TYRES (ALL SIZES) AT OUR GILGANDRA LICENCED TYRE RECEIVAL DEPOT. We will be opening other licenced tyre dumps in strategic locations around Australia, then we will be able to take all of your tyres.

Exciting news; Australian Carbon Recovery, will be teaming up with a major US company to take on OTR retreading.

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Remote Control Equipment & Technology

Remote controlled An automation and software provider has an end-to-end automation solution that promises peace of mind for the remote operation of minesites. By Brooke Showers

O

ne of the world’s largest automation companies has strengthened its offering for remote operations on minesites. Ventyx, an ABB Company, through its acquisition of Mincom, has built up more than 30 years experience in providing solutions to some of the largest and most complex mining operations. The two main drivers for remote operation are occupational health and safety, which removes operators from potentially hazardous situations, and increasing productivity. Swiss headquartered ABB acquired Ventyx in 2010 and Mincom earlier this year and both have a wide client base across Australian mining operations.

The demand for operational and maintenance skills will increase. The two software companies, which have complementary synergies, were shortly after merged under the one banner – Ventyx, an ABB company. There has been strong demand from the Australian mining industry and international players for ABB’s remote operation solutions. “It’s a global phenomenon; all of the major mining houses are putting effort in to trying to achieve remote operation,” ABB Minerals Business Unit technology manager Clive Colbert said. One of the challenges of implementing remote operations at brownfield mining sites is they are characterised by discrete operations. Ventyx vice president – global mining solutions John Jessop said with greenfield sites, a brand new organisation structure can be applied with remote operation centres. “You are not just using the technology for delivery, you are changing the way the organisation actually works,” Jessop said. “When you look at an existing brownfields site, you have an enormous change management situation with the people, to reset the organisation into a way that makes sense in that environment.” There are two main components for

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Ventyx vice president John Jessop.

installing remote operations at brownfield sites. One is the integration of systems, and the second is the integration of people. One of the advantages of a remote operations centre is it allows the traction of more skilled people – an excellent edge in a competitive skills market. It means less workers need to be located out in the remote areas of other countries. Colbert said the demand for operational and maintenance skills would increase,

although with skilled workers based at one central hub, it meant less people were required, as they could be utilised across multiple sites. To establish remote operations on site, ABB provides the communication infrastructure and Ventyx, through its adoption of Mincom, provides the software to make sense of the data. “From an automation point of view, the system takes the sensory information

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Remote Control Equipment & Technology and transfers the data to software programs which dissect how the process is tracking,” Colbert said. Since ABB acquired Mincom, a program has been released to the market called Mining 2.0 which addresses all of these components in different stages. “One of the challenges is integrating all the components of multiple processes in a value chain, combined with multiple disparate sites into a more continuous process,” Colbert said. “It becomes important to be able to look and track material across that whole value chain.” The challenge is organising the work flows across the whole value chain. This end-to-end offering is what sets ABB apart, it says. Colbert said the oil and gas industries had been using remote operation for a number of years and the mining industry was trying to catch up. The oil and gas platforms are mostly operated remotely from shore and petroleum sites are designed for remote operations in terms of robotic maintenance. “Any maintenance that can be done from a plant that is repetitive can be automated in theory,” Colbert said. ABB has been involved with a mining operation in Mauritania, in Northern Africa,

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which is comprised of two mines and five different pits. Mauritania has limited mining expertise so the challenge is how to minimise the number of expatriates – knowledgeable mining engineers and geologists – that need to be based on the ground.

Oil and gas have been using remote operation for years and the mining industry is trying to catch up. Outside of Mauritania, ABB conceptually designed architecture which would enable the control locally for all the operations and also enables a key team in Sydney, comprised of experts, to provide supervision. To effectively plan for maintenance systems, the Ventyx product Ellipse performs tasks in asset management and enterprise resource planning. The advantage of an Ellipse product is it has a mobile work out component, which is useful for remote operations. “In terms of many remote operations centres, what many people really are doing is

exposing data to enable to have information to make decisions,” Colbert said. From a decision support point of view, the application depends on the mine and process. However, in an iron ore operation for example, an important component would be Ventyx software MineMarket, which provides two broad pieces of functionality and logistics across the value chain. MineMarket provides access to real-time information and maximises commercial outcomes by charting the impact of sales and providing a current view of available and upcoming supply of saleable product. A constant challenge across remote mining operations, often based in areas which battle extreme climates and harsh conditions, is designing ruggedised sensors which can withstand the test of nature. Connectivity and sensory performance are essential to remote operation success. “Harsh environments and its affects on sensors and connectivity obviously present issues when handling remote operation infrastructure in remote mining locations,” Jessop said. “ABB runs a very large research budget and a lot of that isn’t just to create base technologies for remote technology, it’s to make them robust in that environment.” brooke.showers@aspermont.com

JUNE 2012 amm


Remote Control Equipment & Technology

Rock solid ethics As more companies strive to demonstrate ethical standards, only the best are officially honoured. By Brooke Showers

A

n international automation company has been named one of the world’s most ethical companies. Rockwell Automation was recognised for the fourth time by The Ethisphere Institute, an international group dedicated to the creation, advancement and sharing of best practices in business ethics, corporate social responsibility, anti-corruption and sustainability. “A defining element that sets Rockwell Automation’s workplace apart from others is our culture of ethics, responsibility and accountability,” Rockwell Automation chairman and chief executive officer Keith D. Nosbusch said. “At every level of the company, our 21,000 employees worldwide have an unwavering dedication to doing the right thing.” The selection of the world’s most ethical companies is now in its sixth year and Ethisphere’s 2012 list highlights organisations which demonstrate leadership in promoting ethical business standards. Ethisphere received a record number of nominations this year, with applications from companies in more than 100 countries and 36 industries.

“At every level of the company, our 21,000 employees worldwide have an unwavering dedication to doing the right thing.” – Rockwell Automation chairman and CEO Keith Nosbusch “Each year the competition for the world’s most ethical companies intensifies as the number of nominations submitted for consideration grows,” Ethisphere executive director Alex Brigham said. “This year’s winners know that a strong ethics program is a key component to a successful business model and they continue to scrutinise their ethical standards to keep up with an ever-changing regulatory environment.” Ethisphere said the increased number of nominations indicated companies’ desire to be acknowledged for their high ethical standards. Of all the categories in Rockwell’s most recent Global Voices Employee Engagement Index, the ethics-related scores were the highest. Employees noted that they understood their expectations for ethical behaviour. They indicated they would report a violation or issue and knew where and how to report such behaviour. “Our global commitment to responsible business practices is absolute,” Nosbusch said. “For us, honesty, fairness, quality and responsiveness are guiding principles and integrity is an underlying value in every business transaction.” brooke.showers@aspermont.com

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CONFIDENT WHEN IT MATTERS In 1979, Datek launched its first transmitter, and since then we have been a leading actor in developing radio transmission systems. We are taking this tradition further with a wide range of customized transmitters for many different purposes. We make daily work safer and simpler for those who work with wireless control of machines – at plants, construction sites and other field operations.

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Remote Control Equipment & Technology

Tracking: anywhere, anytime Technology specialist AVL International has introduced a tracking device which allows 24/7 user monitoring. By Vetti Kakulas

R

emote control equipment and technology is becoming an increasingly populart part of the mining industry – offering safety solutions and saving companies money. Due to the size of Australia and the country’s skills shortage, remote control technologies have become essential for mining companies to monitor their workers on site. With this in mind, AVL International has released an all-in-one tracking device which streams and records audio and video, with live GPS location tracking suitable for the industry. Manufactured in Israel, the tracking devices are customised at AVL’s headquarters in Sydney to suit a range of industry needs. The devices are already heavily used within the security industry in Australia. AVL’s technology can now assist mining companies in tracking assets, providing secure, real-time communications anywhere in the world. The AVL-1 and AVL-4 have 3G and 4G wireless broadband, and satellite transmission, enabling the user to monitor multiple remote sites using wireless mesh networks. “The advantages for monitoring and even operating a valuable plant, such as pumps, gates and fuel dumps are obvious,” AVL International managing director Jamie Brown said. “Our remote communications technology saves money, time and could well save lives.” These tracking devices have a DSP dual streaming of H.264 CODEC. The AVL-1 combines modern surveillance technologies and integrates them into one small unit. Before they can view and record from the tracking device, the user must set up an AVL server with a static IP address. This allows the user to change the AVL-1 parameters live, including the dual encoder which allows remote video streaming and video recording to a Micro SD card. Due to its small size, the unit can be deployed in a variety of places including premises, vehicles and motorbikes. It can even be worn on clothing.

amm JUNE 2012

AVL International’s all-in-one tracking device is designed for the mining industry.

To monitor the tracking device, the source must be plugged into a video and audio machine to enable live streaming to the user. Numerous users can view the live streaming from their desktop, laptop or iPhone. AVL-1 has an alarm push-in button and a virtual fence alarm, which will activate if workers take an unauthorised change in location. If an event is triggered, an SMS can be sent to the monitoring user. Video streaming by the AVL-1 is offered by its remotely controlled PTZ camera. The AVL-4 enables user-monitoring of live video, audio and location data anywhere upon request. It has a client or server management

software for multi-unit support and a flash-based web client for occasional users. AVL-4 has video motion detection and a remote configuration of bit rate and frame rate. It is designed to suit wireless mobile environments. AVL-1 has a five hour internal battery life and the AVL-4 has a three-and-ahalf hour battery life. Both versions do not require any interconnecting cables, since everything is built into the printed circuit board. The units feature a mini USB flash drive plug, a multi-function dip switch, a microphone output and status LEDs. AVL International provides repair and maintenance support for its tracking devices. vetti.kakulas@aspermont.com

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Remote Control Equipment & Technology

Wolf will protect you A new range of control stations offers safety and durability. By Vetti Kakulas

S

afety product manufacturer Remote Control Technologies has joined forces with Royal Wolf to develop a mini-cube control station. Royal Wolf, based in Perth, WA, is a company specialising in the hire, sale and modification of shipping containers. The TeleRemote Cabins were designed to create a safe working environment for underground miners operating heavy machinery. RCT national sales and marketing manager Craig Buchananb said it was important employees felt safe and secure when working in the challenging conditions of the mines. “The TeleRemote cabin, made using Royal Wolf ’s mini cubes, can withstand the harshest of mining conditions, whilst providing the operator with the comfort of working in a station style set up,” he said. RCT has transformed the cabins by

installing heavy duty electronics, airconditioning and an in-built barrier system. Cabins can be used as remote control stations for surface and underground mining applications. The mini-cubes are 2.3m by 2.3m, have wood-based flooring and a protective chassis made of steel. “Each control cabin can move up to one hundred times in its lifetime, so the robust nature of the container and its ability to be relocated easily makes Royal Wolf ’s mini cubes the perfect solution for the confined spaces we work in,” Royal Wolf Western Australian regional sales manager Dion Clifford said. “We believe it is essential to provide our workers with a comfortable environment. Control systems can be managed from the back of a four-wheel-drive, but we have found operators prefer to work from the cabins as they tend to be more comfortable.”

A user safely operates heavy machinery inside the TeleRemote Cabin.

RCT has been a client of Royal Wolf for more than 10 years. The TeleRemote Cabins are produced by RCT at their head office in Perth and also at its Kalgoorlie branch. vetti.kakulas@aspermont.com

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Mine Safety

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Mine Safety

Hot coal Bush fires are an ever-present risk in many parts of Australia, so it is essential that workers receive fire awareness training. By Brooke Showers

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orkers at a coal mine in New South Wales have been given the latest in fire safety training. Fire protection specialist Wormald has delivered fire safety awareness training to employees at Xstrata Coal’s open cut Glendell coal mine on how to prevent and prepare for fires. Due to remote mines often being based near fire prone areas of bushland, Wormald conducts regular training with workers at all levels within mining organisations to maintain high skill levels in their emergency response capabilities. “Knowing how to use the correct fire protection equipment means that staff can confidently manage an emergency situation,” Wormald Newcastle training manager Bernie Pilgrim said. Glendell is in the Hunter coalfields at Hebden in the Upper Hunter Valley, about 26km southeast of Muswellbrook in NSW. The fire awareness training conducted at Glendell included a combination of theory, practical and assessment allowing staff to get involved in hands-on training. Personel are taught how to adopt correct procedures upon discovering a fire, how to identify different types of fire equipment

Fire safety training is vital.

on site and how to use fire equipment correctly. The training also addresses how to determine the class of fire and select the correct equipment for each type. “Training is a critical element of fire safety planning and is particularly important in the high risk industries such as mining,” Pilgrim said. “It is vital that all staff know what to do in the event of a fire.” Pilgrim said the training helped organisations develop effective plans and

procedures which could be readily executed if there was a fire. Wormald holds a wide range of fire safety training courses for the mining industry including confined space entry, breathing apparatus, fire extinguisher, spill response, lay flat hose and fire safety adviser training. Wormald has been offering fire protection solutions through Australasia since 1889. It designs, manufacturers, installs and services fire detection and protection equipment to a wide range of industries. brooke.showers@aspermont.com

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Mine Safety

Sounds like a plan Hearing injuries related to excessive noise exposure have been reduced at an aluminium refinery, thanks to an innovative safety program. By Brooke Showers

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n aluminium producer has been handed a safety award for its efforts in reducing noise exposure and preventing hearing loss. Bauxite mining company and aluminium producer Alcoa won a safety innovation award for the program it’s running at its Pinjarra refinery, 86km south of Perth. The Road to Silence hearing conservation program was introduced at the aluminium refinery in 2006, at a time when hearing loss was being reported at an increasing rate. A number of best practice ideas and equipment were incorporated to enhance the noise program in a bid to improve the issue. “Alcoa introduced a combination of controls, which include a program to ensure ear plugs are fitted correctly, noise badges and the tracking of noise exposure in real time,” Alcoa safety director Danny Spadaccini said. “We enhanced walkway signage, hand tool labelling, noise task controls, a ‘Buy Quiet’ program and various educational initiatives, including our Road to Silence DVD.” Unsafe levels of noise are generated on site from general refinery equipment such as pumps, motors and blowers. Some of the tasks at the refinery require the use of noisy power tools when workers are jack-hammering, descaling, grinding or hammering. The hearing injuries workers are exposed to are known as noiseinduced hearing loss. Noise exposure can have a cumulative effect on hearing over a period of time, known as incremental loss. Over five years, the Alcoa refinery reduced hearing exposure during 12 hour shifts to less than one per cent of the workforce population. In 2011, there were five cases of recordable hearing loss at the site and there are no cases recorded so far this year. “We are immensely proud of our occupational hygienists and technicians whose ingenuity will prevent hearing damage in operators for decades to come,” Spadaccini said. Alcoa won the safety award for its combination of noise controls at the 2012 Western Australian Chamber of Minerals and Energy Safety and Health Innovation Awards in April, under the systems category. The systems category recognises the innovative implementation and/ or design of a system or procedure which impacts on safety and health. “Innovative programs being developed by individual companies highlight the entire industry’s commitment to continue to improve safety performance,” CME chief executive Reg Howard-Smith said. Improvements at Alcoa since the Road to Silence program was introduced have included a greater understanding among employees of the risk of hearing loss from occupational noise, greater hearing compliance and reduced hearing exposure. Alcoa’s noise initiative included the Quiet Dose system, which is able to significantly measure hearing levels and manage effective conservation programs.

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Mine Safety

PorT HaZarD rer FolDe TA K E

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Alcoa’s National Hearing Awareness Week display.

“Quiet Dose is a highly precise noise level monitoring system that measures in-ear noise exposure while hearing protection is being worn,” Spadaccini said. Alcoa has an employee working between the Pinjarra refinery and its Huntly mine to test employees using the Quiet Dose device. “This commitment is essentially best practice when it comes to hearing preservation and protection,” Spadaccini said. Alcoa’s original noise program was committed to hearing protection by providing devices such as ear plugs and ear muffs. However, prior to the implementation of the hearing conservation program, no one could be sure the devices were minimising noise exposure to safe levels within the ear. Ear plug selection has since expanded and employees are fitted every two years and examined with their ear plugs in to test the noise exposure and ensure all ear plugs are fitted correctly. Hard hat stickers were introduced to help workers identify when the employees’ next ear plug fit check was due. Hand operated power tool labelling was implemented to indicate hearing protection requirements during operation. The Buy Quiet program at the refinery endorses that all new equipment be reviewed for noise reduction opportunities. “Alcoa goes over and above with training and education programs,” Spadaccini said. “Whilst every effort is employed to protect employees from noise exposure, further engineering expertise is employed to reduce occupational noise, where possible.” Alcoa also introduced a major education campaign during National Hearing Awareness Week last year and held a Family Day with a hearing safety booth. The booth had an iPod checker demonstration run by the Grow Smart Foundation to show how loud music was being pumped into children’s ears through headphones to the point at which it could damage hearing. brooke.showers@aspermont.com

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Mine Safety

Keep a cool head From iron men to iron ore, hydration management initiatives are emerging to keep workers safe in hot mining environments. By Brooke Showers

M

iners are being urged to embrace the same hydration used in sports science in a bid to combat heat stress. Companies are turning to education and management practices to keep their workforce hydrated. Electrolyte replenishment is vital to maintain health, safety and productivity. Rio Tinto is addressing the issue of thermal stress and hydration management through a range of measures including prevention, risk recognition and knowledge. But one of the greatest hydration risks for employees battling heat stress on remote sites and in steamy underground mines, can be just simple ignorance. It’s vital that workers follow the advice provided and for company programs to convey that message effectively. “Communication programs are the best approach to drive the message home about how important it is to stay hydrated during long shifts in the heat,” a Rio Tinto spokesman said. Rio is in the process of running several pilot programs and trialling different ways of measuring thermal stress at its iron ore mining operations in the Pilbara region of northwest Western Australia.

NEW

Rio Tinto’s Brockman 4 iron ore mine in Western Australia’s Pilbara.

Rio’s Argyle diamond mine underground project won an award in the people category at the Chamber of Minerals and Energy WA Safety and Health Innovation Awards this year for its multi-dimensional program which improved workers’ hydration. The Argyle mine was identified as having an increased thermal risk, due to its location in the East Kimberley, in addition to the intense

heat sources present in an underground mine. The hydration improvement program was developed in collaboration with the ventilation engineer and management team. It successfully reduced the number of clinically dehydrated personnel from 14% in November 2010 to 0.3% in March last year. Rio is running a trial at its West Angeles mine in the Pilbara, testing a range of

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devices to examine what works best to provide an overall “read” on a worker’s condition and exposure to risk. Environmental and physiological factors which have a significant bearing on a worker’s stress, or potential for stress, can be monitored using these devices. Rio said there were a number of products on the market that measured core temperatures, urine specific gravity, heart rate, recovery and fatigue. A fatigue management program is researching the contributing factors that can be dangerous when exacerbated by thermal stress. Factors which can affect hydration levels include work load, access to Hydrating: Recovery e21 capsules. shade and water, intensity of work, and equipment temperature. Employees have a responsibility to take their own approach to hydration management once they are supplied with the correct tools. They are urged to consider their fitness for work, diet, acclimatisation, body mass and water consumption. Fatigue can be reduced if higher degrees of automation for onerous, repetitive and exposed work is used to replace manual tasks. Rio’s thermal stress management plan does not advise drinking “sport drinks”, which it says are high in sugar and electrolytes when all that the body needs is water. Two major underground coal mines in New South Wales have been avoiding the sports drink solution too, instead opting for athletic supplement capsules. Arcadian Nutraceuticals, which manufactures the capsules, has been working with health and safety officers at the coal mines to help workers adopt a healthier approach to managing an electrolyte balance. The approach is said to have already prevented injuries, heat stress and fatigue while boosting productivity. Health and safety officers at the mines observed a reduction in personal injuries among their underground workforce during the trial, and a turn around in safety performance. ”When you sweat, the body releases fluids containing salts and minerals. The air evaporates the fluid, whilst the salts and minerals left on the skin’s surface can be re-absorbed back into the body,” Arcadian Nutraceuticals founder and chief executive officer John Morris said. “In the mining industry, clothing is a blotting paper against the body’s natural system of sweating. “It denies the body the opportunity to re-absorb the electrolytes which naturally occur in the body. “Our capsule is all about replacing the lost salts in a completely harmonious situation.” Arcadian’s Recovery e21 capsules were originally used for iron men competing in the heat and humidity in Hawaii. Morris drew parallels between the hydration needs of coal miners and the iron men during the race. He said in the early days of mining before long sleeves and pants, miners traditionally ate heavily salted meat and bread, fruit and vegetables, unprocessed foods containing minerals and salts and drank lots of water. When people consume high levels of coffee and energy drinks, the urinary tract works overtime and the body excretes electrolytes. “Miners require greater volumes of electrolytes that can be delivered by any sports drink or gel,” Morris said. “Recovery e21 fuels the body with a balanced, natural full-spectrum, rapidly absorbed electrolyte source. “Our attack in the mining industry is one of hydration, and hydration isn’t just drinking water. Hydration is balancing your electrolytes.” brooke.showers@aspermont.com

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Mining & the Environment

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Tyre troubles A mining contractor is looking at environmentally friendly alternatives to burying mining truck tyres in the ground. By Brooke Showers

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n Australian tyre management company is investigating environmentally friendly ways to dispose of mining tyres. In some states, tyres are buried in the ground near mines after they’ve reached the end of their working life. But manufacturers don’t use environmentally friendly materials which naturally decompose in the soil. Otraco International, a subsidiary of mining contractor Downer EDI, believes this means of disposal will not be environmentally sustainable or best practice in the future. Otraco is now exploring alternative recycling options. “We don’t think that is going to be tenable going forward, so there is a role for tyre recycling in the industry and Otraco is certainly pursuing innovations in that field,” Otraco International general manager Alistair Swanson said. “We hope to dispose of tyres on site.” The Australian mining industry is yet to develop a broad set of strategies to effectively dispose of tyres. There are a few initiatives emerging as miners and tyre manufacturers become increasingly aware of the difficulties and costs associated with processing tyres for resource recovery. With a shortage of rubber and an increasing demand for tyres, recycling mining tyres can be a viable solution if logistical and economic measures are met. There are two main challenges facing a recycling method for mining tyres. One factor is the rubber and steel parts on the tyres are made to be indestructible, so breaking them down is difficult. Also tricky is the logistics involved in getting tyres from remote mine sites to waste management facilities in capital cities. With truck tyres measuring up to 3.5m and weighing nearly three tonnes, only a few tyres can fit on a dump tray at once. The cost of moving tyres from the Pilbara, in northwest Western Australia, to a processing centre in Perth, 1500km away, is expensive. If tyres can be processed near remote mines through mobile processing equipment or by establishing a facility close to site, it can reduce the logistics and costs associated with delivering tyres to a central processing facility. Otraco has an initial interest in high powered machinery which can

JUNE 2012 AMM


Mining & the Environment be taken to site to break down as much of the tyre as possible. This means three times as many tyres could be transported. “There is a lot of energy embedded in a tyre on release and there is a lot of high quality steel which has a market value,” Swanson said. “It seems criminal that we are just burying them on site; you can’t do that forever.” Tyre disposal is one way of diversifying the economy in the region and creating more employment opportunities. Not only is it better for the environment, the recycled tyre products can be exported to overseas markets or used in the Pilbara’s own backyard. “It could be an element of the economic diversity, because there is value in it, there are jobs in it and there is a real industry driver for it to take place,” Swanson said. “We believe the legislation is coming which will enforce a solution and Otraco is going to be there providing that answer.” A report released by the Minerals Council of Australia in 2006 estimated some 65,000t of mining tyres was disposed of in Australia each year. It’s likely this number has increased since then. According to the report, most recycling technology in Australia has been developed for passenger vehicle tyres which are much

smaller. “The higher proportion of natural rubber found in large earthmoving tyres is more valuable than the synthetic rubber used in passenger tyres, offering different, niche recycling opportunities,” it said. End of life tyre uses identified in the MCA paper include civil engineering applications, waste to energy – as derived fuel – and waste tyre reprocessing into recovered rubber.

“It seems criminal that we are just burying them on site; you can’t do that forever.”– Otraco International

general manager Alistair Swanson

Papua New Guinea based copper-gold miner Ok Tedi Mining recently began pursuing a unique rubber recycling program to convert worn out mining tyres and conveyor belts into rubber crumb for industrial uses. The tyres are processed into rubber granules and then used to make rubber materials and products. Ok Tedi managing director and chief executive officer Nigel Parker said the mine had accumulated an estimated 40,000 cubic metres of tyres over the past three decades.

Tough: The robust nature of tyres makes them difficult to break down.

“Mine sites have disposed of tyres in landfills which, environmentally, is not a good solution,” Parker said. “The world mining industry will be looking on, particularly Australia. At the moment, there’s no process to treat these mining tyres. “Once this project is successful, we can look to share with other mine sites in PNG and Australia.” brooke.showers@aspermont.com

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Fluid Handling

Made in Australia HYDRAULIC hose and connector specialist Enzed has revamped its manufacturing facility in Wodonga, 320km northeast of Melbourne, Victoria. Enzed was established in New Zealand in the mid-1970s and expanded into Australia in 1981. It was the first company to meet its clients for hydraulic hose and connector repairs. Enzed distributes products by global hydraulic hose manufacturer Parker Hannifin, which is based in Cleveland, Ohio, US. Parker Hannifin recorded more than $12 billion in annual sales in the last financial year. The Wodonga manufacturing facility has become the hub for Enzed’s manufacturing activities for the Australasian region, dispatching orders across Australia and New Zealand. Prior to the revamped headquarters, there were two factories based in Adelaide and Auckland. The three factories are now centralised under one roof at Wodonga, with

Enzed distributes products by American manufacturer Parker Hannifin.

the others closing down. Enzed’s relocation to Australia has reduced lead time from order to receipt and is closer to the primary customer base for its Parker product lines.

Wodonga was chosen due to its location, as it is equipped with rail, road and port freight channels. “It is a better utilisation of resources and

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Enzed has consolidated its three factories into one hub situated in rural Victoria.

people,” Parker Hannifin localisation manager Greg Dingle said. Known as the Parker Wodonga plant, the revamped factory now employs more than 120 staff, an increase of 40. The Wodonga factory first opened in 1991, although it has expanded over the course of the last nine months. “Parker Wodonga’s significant expansion in recent months is a real vote of confidence in the strength of Australian manufacturing and the quality of its employees,” Dingle said. It has also been recognised by the federal government’s Australian Made, Australian Grown campaign. “We now have a fully functional engineering team on-site delivering innovation, design, quotations, process improvement and field analysis,” Dingle said. Additionally, Wodonga TAFE and Parker have reached an agreement to continue to

develop employee skills. The 11,000 square metre factory is based on a four-hectare site located on the Hume Highway, conveniently situated between Sydney and Melbourne.

“For Enzed customers, there is a dual benefit.” – Parker Hannifin localisation manager Greg Dingle It manufactures products used by Enzed field technicians in the service and repair of industrial plant equipment. To meet customer demand, Parker Wodonga has installed a hydraulic hose braider. The plant produces a range of PVC hoses and fittings, andsee is capable manufacturing Come us at ofQME stand #2

more than two million hose fittings and adapters annually. It has an in-house plating service, offering plating and dispatching of orders within 24 hours. The Chromium-6 Free plating process is said to be environmentally friendly and is designed for protection against rust and corrosion. Parker Wodonga has introduced a rapid response service for customers which enables it to quote, design, manufacture and plate product to meet short lead-times. The service is available for steel, brass or stainless steel fittings. “For Enzed customers, there is a dual benefit,” Dingle said. “They are not only getting world-class hydraulic hose products and engineering services, but also providing a direct boost to Australian manufacturing and Australian jobs.” vetti.kakulas@aspermont.com

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Australia’s Contract Miners & Drillers

Safely managing safety An integrated approach to managing contractor safety allowed an engineering company to reduce its injury frequency rate and increase productivity. By Brooke Showers

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onsulting, training and technology business DuPont Sustainable Solutions worked with G&S Engineering Services to reduce its recordable injury frequency rate to around nine per one million man hours. DuPont works with businesses to transform work places and cultures to become safer, more efficient and operationally more sustainable by using a six step approach. To improve the safety of contractors, the DuPont approach focuses on selecting, engaging, communicating, reviewing, training and evaluating. “Overall, the safety management of contract workers is a matter of concern to both mine operators and the contracting companies they work with,” DuPont Sustainable Solutions Australia, New Zealand and Pacific Islands business director Fiona Murfitt said. “Once the playing field is level in terms of contract value, location and service quality, it is clear that the key players in this dynamic growth industry are looking to safety for their competitive advantage.” Research carried out by Safe Work Australia indicates that each day, seven employees in

100

the mining industry take one or more weeks off work due to a serious work-related injury. The employees are mainly contractors. DuPont said more than 25% of Australia’s workforce is made up of part-time or casual workers and managing contractor safety needs to be done through effective processes.

“Throughout the project, there is also a role to play in setting the bar high and holding everyone to the same set of standards – both contractors and employees.” – Fiona Murfitt, DuPont Sustainable Solutions Fundamentally, the activities contractors undertake tend to be operational by nature, often requiring people for manual tasks. This, combined with contractors often working in unfamiliar environments, increases the likelihood of an incident.

DuPont examined what processes needed to be in place to look after a contractor workforce if it is prone to injury. It found the best method is to engage and clearly communicate the required objectives and standards of performance. “The performance of contractors should be scrutinised, not only from a financial and productivity standpoint, but also from a safety perspective,” Murfitt said. “Throughout the project, there is also a role to play in setting the bar high and holding everyone to the same set of standards – both contractors and employees.” According to DuPont, G&S Engineering Services chooses to only partner with companies which share similar, robust safety processes. To manage its exposure to risk and transfer its local safety practices into international best practice, G&S engaged with DuPont between February 2010 and December 2011. During this time, G&S began to benchmark against global skill sets and performance measurements. DuPont started by recording what was occurring on site and putting in place some metrics for the business.

JUNE 2012 amm


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Australia’s Contract Miners & Drillers

Fiona Murfitt

At G&S, there were both leading and lagging indicators in different areas. The ownership by the line of accountability was really important for G&S, and essential safety committees were put in. Driving a clear message from the top

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down is a major point of focus for DuPont when engaging with clients, and G&S chief executive Mick Crowe was right behind the safety message. “We are driving continual improvement and the ongoing promotion of a safety culture that is second to none,” Crowe said. “We are benchmarking our standards against world wide standards.” G&S expects all subcontractors and partners to adopt its level of safety. The G&S Safety Charter states: ‘working safely means better customer relationships because where less time is lost to incidents, operating costs reduce and productivity increases.’ Over the past six months, G&S implemented key changes and initiatives to improve G&S and achieve a goal of creating a “zero exposure” environment with zero harm outcomes. G&S has a company goal to reach a recordable injury frequency rate goal of 3.75 per million man hours by the end of 2012. In the 2007-2008 financial year, G&S had a recordable injury frequency rate of 19.74, which dropped to 9.7 in the 2009-2010 financial year. Safety processes during major shutdown work, once an element of the G&S business, which drove the recordable injury frequency

rate up as high as 35.88, have dramatically improved within the business. The shutdown injury rate is now 8.29, a 77% reduction over the past ten months. In January last year, G&S adopted the US Occupational Safety and Health Administration standard for its injury classifications.

G&S developed grinder guards for workers using grinders in kneeling positions. G&S became aware of the significant injury classification within the OSHA and realised a couple of classifications which should have been recordable injuries. Unlike other recordable injuries, a significant, diagnosed injury or illness is recordable under the general criteria of the OSHA standard. This applies even if it doesn’t result in days away from work; restricted work or job transfer; medical treatment beyond first aid, and loss of consciousness. G&S also introduced a more robust

JUNE 2012 AMM


Australia’s Contract Miners & Drillers selection process for supervisory and management positions. It is in the final stages of developing a supervisory and HSE advisor development program, to ensure supervisors and advisors are aware of the G&S systems and processes. By recognising even minor incidents can provide relevant lessons through investigation, G&S can implement controls to mitigate reoccurrence and help prevent more serious injuries. “We have increased the robustness of our incident investigations,” G&S said. Under equipment and policy modifications, G&S developed grinder guards for workers using grinders in kneeling positions and sleeper handles, to prevent potential hand injuries. DuPont’s approach to contractor safety establishes a strong business case for setting and maintaining acceptable safety standards throughout the organisation. When starting a project in a short period of time, Murfitt said it was important for client companies to outline their criteria about what was expected up front at the beginning of a project. “Addressing what is important and building in the safety and risk management are all part of that process, so you get the right people for the right job, and set expectations up clearly from the start,” she said.

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Six steps to managing contractor engagement effectively Selection – Choose the right people for the right job Engagement – Engage contractors and outline expectations Communication – Hold discussions and meetings with contractors to stay in the loop Review – Ensure expectations are being met and acknowledged Training – Ensure staff have training and resources Evaluation – Provide feedback on potential improvements

Hiring the right people for the right job at the beginning of the project so it runs smoothly will save time later, rather than just trying to fill a space with someone who may not be capable of the role. Often contractors are not treated the same as employees and communication and engagement with the contract workforce regarding the criteria outlined is vital. “Managing the contractor is all about making sure you meet regularly and engage right through the process,” Murfitt said. “It’s important to regularly discuss if the contractors are following the agreed process.” The communication loop is also important for identifying if expectations are met and to

provide feedback about how some elements could be done better. “When companies are out there looking for businesses to deliver their services, safety is a metric which has been brought in for a lot of companies,” Murfitt said. “If you are delivering services to these companies in the bigger resources sector, then their expectations are that you have these things in order ... if you have a value for it and are meeting it within your own business, then you will actually drive that better performance out on other operational sites. “If you are using contractors for yourself, then you will be pulling them up. They are, in effect, operating as you on those sites.” brooke.showers@aspermont.com

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Australia’s Contract Miners & Drillers

Bringing in the billions Australian success story Leighton Holdings has landed more than $2 billion worth of contracts this year, with the promise of a lot more to come. By Brooke Showers Leighton Contractors operations at Peak Downs coal mine in Queensland’s Bowen Basin.

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n Australian contractor has already secured more than $2 billion worth of contracts this year, with another $6 billion awaiting the rubber stamp.

Leighton Holdings has landed lucrative contracts through its subsidiaries’ mining divisions for a number of mine and infrastructure contracts. Its latest contract award is worth $604

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million, for the mining services contract at BHP Billiton Mitsubishi Alliance’s Peak Downs mine in Queensland’s Bowen Basin. The three-year deal, awarded to Leighton Contractors’ mining division, will extend the services provided at the mine and also include project management, fleet maintenance and operational services for overburden mining. “This demonstrates our ability to work closely with our clients and add value to their operations,” Leighton Contractors mining division general manager Greg Fokes said. Fokes said he looked forward to continuing to work with BMA and developing future opportunities in the region. The Peak Downs contract extends from services already provided by Leighton at the mine over the past 11 years and adds to the string of contracts Leighton is scooping up. Leighton Contractors recently secured an $84 million work order to build a temporary workers accommodation village for the Australia Pacific LNG project on Curtis Island. The accommodation village will house 2600 workers and provide infrastructure to house project teams during the construction period. It is due for completion in 2013. Earlier in the year, Leighton subsidiary Thiess was awarded a $180 million contract with BMA for civil earthworks. This project will support the development of the $4 billion Caval Ridge coal mine, 25km southeast of Moranbah and not far from Peak Downs. The contract includes the construction of heavy haul roads, early works for product stockpile and conveyor area, drainage infrastructure and creek diversions, and the handling of nearly 7 million cu.m of material. Caval Ridge is expected to produce up to 5.5 million tonnes per annum and process

JUNE 2012 AMM


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Australia’s Contract Miners & Drillers

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an additional 2.5Mtpa from Peak Downs. Thiess also collected a $1 billion mining contract to extend mining operations at OZ Minerals’ Prominent Hill copper and gold mine in South Australia over six years. The partnership between Thiess and OZ has strengthened since Thiess first constructed initial mine infrastructure at Prominent Hill in 2006. Overseas, Leighton’s Middle East operations won a $US169 million ($A166 million) contract in April, as part of a joint venture, to construct infrastructure for the Ma’aden Alcoa aluminium bauxite mine in Saudi Arabia. Based in the Middle East, the company’s 45%-owned subsidiary Habtoor Leighton Group won the contract through a joint venture with Dragados Gulf Construction Company. Habatoor Leighton Group’s share of the contract is worth $85 million. Work, due to be completed by March 2014, includes construction of a pioneer fly camp and temporary facilities main camp, a material handling system, mine village and connecting road and utilities. In March, Leighton Contractors signed a five-year agreement with Rio Tinto to deliver earthworks projects and structural, mechanical, piping projects for its Pilbara expansion. Rio is investing more than $18 billion in the next five years to expand its iron ore operations in the Pilbara, from 225Mtpa to 283Mtpa in 2013 and 353Mtpa by 2015.

“The group’s outlook is positive with a near record level of work in hand, a solid balance sheet and favourable market conditions.” – Leighton Holdings chief executive officer Hamish Tyrwhitt

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The agreement delivers earthwork contracts for the eastern stream of Rio’s expansion, which covers the Hope Downs 4, Marandoo, Yandicoogina and Koodaideri mines. Earlier in the year, Leighton Contractors was awarded the first structural, mechanical and piping contract for the Brockman 4 mine, which is due for completion by July. Construction contractor Broad Group, a subsidiary of Leighton Contractors, obtained $300 million worth of major construction projects throughout Australia, including a major contract with Rio Tinto. Some of Broad’s projects will be situated in remote areas with a focus on mining camps, associated infrastructure and work with indigenous communities. Also in March, Leighton Contractors was awarded a contract extension worth $125 million to deliver mining services at Macarthur Coal’s Moorvale mine in the Bowen Basin. Fokes said the contract extension highlighted the successful partnership with Macarthur Coal. “It’s also a positive step for us in building our relationship with Peabody Energy, following its 100 per cent acquisition of Macarthur Coal in 2011,” he said. “We look forward to working with Peabody Energy to further improve productivity at Moorvale mine.” Leighton Holdings forecast a $600-650 million profit after tax for the 2011-2012 financial year and said it remains on track to deliver a profit. For the six months to December 21, Leighton recorded a net profit of $340 million, up from $216.7 million in the previous corresponding period. The company said the increase was based on strong performances across its core construction and mining operations in Australia and Asia. “The group’s outlook is positive with a near record level of work in hand, a solid balance sheet and favourable market conditions,” Leighton Holdings chief executive officer Hamish Tyrwhitt said. Leighton is preparing around $30 billion worth of tenders and said it had preferred positions on another $6 billion worth of potential contracts. brooke.showers@aspermont.com

JUNE 2012 AMM


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Australia’s Contract Miners & Drillers

BGC bags Hancock’s Roy Hill contract Gina Rinehart’s emerging Pilbara iron ore mining company has awarded a multi-million dollar contract to BGC Contracting. By Vetti Kakulas

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erth-based BGC will construct the aerodrome and mine site internal roads for the Roy Hill project in Western Australia’s Pilbara. “BGC Contracting is proud to be a part of such a significant project for Western Australia that will create more than 4000 jobs during the construction of the overall project,” BGC Contracting chief executive officer Greg Heylen said. “We look forward to delivering a quality outcome for the Roy Hill project and maintaining a long and mutually rewarding relationship.” The $120 million contract is set to be

completed by March 2013 and includes the construction of the aerodrome, the airport road and village road. BGC is also involved in the early contractor involvement contract for the construction of a 340km railway from the mine to port and associated infrastructure. BGC Contracting was previously awarded an ECI contract for the roads and crossings package for Atlas Iron’s Turner River Hub development in WA’s Pilbara. The $80 million contract involved the construction of 100km of unsealed haul roads, linking three mines with the central ore processing hub at Turner River.

Construction works at Turner River Hub commenced in July 2011 and are expected to be completed in January 2013. The Roy Hill mine is majority owned by Hancock Prospecting, which holds a 70% stake. Other project partners include firms from Japan, South Korea and Taiwan. A $3.2 billion investment by Hancock’s Asian partners was formalised in Sydney last month. Located 277km south of Port Hedland, the project’s expected to start operations in 2014, producing 55 million tonnes of iron ore by 2015. vetti.kakulas@aspermont.com

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109


AustrAliA’s

Contract Miners & Drillers

ExClusivE survEy

2012

Based

Established

Ownership

CEO/MD

Business contact number

Business focus

No. of employees

360 DRILLING PTY LTD 17 Broadwood Street West Kalgoorlie WA 6430

2002

Brad Close (owner and director)

Brad Close (owner and director)

08 9091 9955

In the hole hammer drilling specialist, covering hole sizes from 85mm to 305mm to a distance of 200 plus metres in any direction covering a radius of 360 degrees. Production drilling – up holes & down holes – slot rising – escapeway rises – service holes – ventilation rises – ore pass rises – paste fill holes – steel casing of paste fill holes – civil drilling. 360 Drilling has a growing range of specialised underground equipment, which offers greater operational flexibility that is capable of meeting all our clients’ needs in providing our drilling service

40

ABERGELDIE COMPLEX INFRASTRUCTURE NSW, QLD, ACT 5 George Young Street, Regents Park NSW 2143

1994

Private

Michael A Boyle

02 8717 7777

Complex infrastructure including shaft construction, tunnelling and associated civil, electrical and process works

200

ALLIANCE CONTRACTING PTY LTD Level 1, 170 Burswood Road, Burswood, WA, 6100

1999

Privately owned

Mark Breingan

08 9470 8700

Contract mining ranges from site construction, load and haul, drill and blast, feeding crushers and rehabilitation; provide dry hire, wet hire and specialised operators; materials handling equipment for transport of bulk materials; crushing – ranges from crusher feed, rom pad management, rockbreaking, mobile crushing and screening plants; project management – provide a stand-alone or construction management service to work in an integrated manner with existing project teams

AUSDRILL LIMITED 6-12 Uppsala Pl, Canning Vale, WA, 6155

1987

Publicly listed

Ron Sayers – MD

08 9311 5666

Open and underground mining services, drill/blast, exploration drilling; earthmoving

AUSTRALIAN CONTRACT MINING 66 Ord Street, West Perth, WA 6005

2000

Private

Brian Rodan – managing director

08 9322 3488

Underground development and production mining, shaft sinking, alimak raising, surface and underground diamond and reverse circulation drilling, shotcreting and raise boring

AUSTRALIAN SHAFT DRILLING 2 Roseby Rd, Caboolture Qld 4510

2004

Dean Furness

07 49557880

Shaft development

35

BARMINCO LTD 390 Stirling Cresent, Hazelmere WA 6055

1989

Gresham Private Equity

Jock Muir

08 9416 1000

Barminco is one of Australia’s leading underground mining contactors. Established in 1989 to provide underground mining contact services to the West Australian mining industry, Barminco has now expanded its operations to other states in Australia and overseas. Barminco provides the plant, the people and the know how or expertise for hard rock underground mining. We have a range of experience with most mining methods from narrow vein small deposits to large scale sub-level cave operations. Barminco is well respected within the industry and has an impressive performance record in both safety and operations.

Barminco 2227, AUMS 862

BGC CONTRACTING 290 Bushmead Road, Hazelmere WA 6055

1992

BGC (Australia) Pty Ltd

Greg Heylen

08 9442 2300

Contract surface mining, drill and blast, haulage, crushing, civil infrastructure, infrastructure maintenance, crushing and quarry materials

1600+

BOSTECH DRILLING AUSTRALIA PTY LTD Unit A, 29 Clayton Street, Bellevue WA 6056

1993

Private

Peter Boswell and Duncan McConachy

08 9250 4252

RAB; aircore; slim-line RC

35

BULLION DRILLING CO Kalgoorlie, WA and Port Augusta, SA

2004

Paul Scanlon

Jackie Scanlon

08 9022 9429 or 041 798 5456

Safe exploration drilling, RAB, aircore, RC drilling

10

BYRNECUT AUSTRALIA PTY LTD Baker Road, Perth Airport WA 6105

1987

Steven Coughlan

08 9270 1000

Underground mining – development and production, shaft sinking, raise drilling, shotcreting, engineering maintenance, maintenance and electrical labour supply, equipment hire. Mine design and consultancy. Indigenous labour training and labour hire

>1,600

CARUANA DRILL & BLAST Mackay, North Queensland 167 Barren Creek Road, Calden Qld 4798

Trading for 20 years

Caruana Holdings Pty Ltd

Kyle Caruana

07 4958 8286

Drilling, blasting, drll rigs, earthmoving equipment hire services for quarries and mine sites throughout Australia, specialising in bank stabilisation and ground support by means of drilling and grouting of soil nails, rock bolts or ground anchors, then following with the installation of rockfall protection netting or shotcrete

CKM CONTRACTING Toowoomba, Collinsville

2010

Private

Craig McLean

07 47855490

Mining rehabilitation

110

30+

JUNE 2012 amm


es

,

AustrAliA’s

Contract Miners & Drillers

ExClusivE survEy

2010-2011 revenue/ turnover

Forecast 2011-2012 revenue/turnover

Work in hand (current order book value)

$72 million

2012

Equipment fleet (current value)

Major contracts (current)

5 x Cubex drill rigs, 1 x Ingersoll Rand drill rig, 15 x electric\diesel compressor range, 9 x (late model) Toyota 4x4 underground vehicles, 5 x work baskets, 5 x sea container workshops, 1 x CAT – IT28F loader, 1 x CAT – 262B skid steer, 1 x BHB yard crane 10 tonne, 2 x forklifts – CAT/Hyster, 1 x containerised 1,000kVA Detroit 16v diesel\Kato alternator genset, 1 x 750 kVA substation, 1 x 1200m² purpose built maintenance facility (Located in West Kalgoorlie WA)

Rio Tinto – North Parkes mine NSW, Barrick Gold Australia sites, Mincor Resource sites

$107 million

$109 million

$23 million

We currently have five major contracts for drilling shafts.

$507 million (contract mining Australia), $227 million (contract mining Africa)

$657 million (property, plant, equipment at 6 months to December 2011)

BHP Billton, Kalgoorlie Consolidated Gold Mines, FMG, Rio Tinto, Kinross, Gold Fields, AngloGold Ashanti, Oz Minerals, Perseus Mining, Endeavour Mining, Golden Star Resources, Randgold Resources

$23.5 million

$92.2 million

$25 million

Moranbah North, Lady Loretta, Oaky Creek

(WA) – Marvel Loch, Sunrise Dam, Flying Fox, Wallaby, Rubicon, Gwalia Deeps, Kanowna Belle, Tindals, Agnew, Spotted Quoll; (QLD) – Mt Gordon, Eloise, Ernest Henry; Dugald River; (TAS) – Rosebery, (Overseas) – Sukari (Egypt), Moab (South Africa); African Underground Mining Services (AUMS): Awaaba Deeps (Ghana), Subika (Ghana), Gara (Mali), Yalea (Mali), Paboase South (Ghana)

Koolyanobbing Alliance (Cliffs Natural Resources), Wodgina iron ore (Atlas Iron), Spinifex Ridge (Moly Metals Australia), Roy Hill iron ore project (Roy Hill Infrastructure), Macedon project (BHP Billiton), 8 Mile Yard (Rio Tinto), Project Aurora (Dyno Nobel), Jax Bulk sample pit (QCoal)

4 x Bostech Drill Boss 200 rigs, one new Bostech drill Boss 300 drill rig to be commissioned in July 2012

Anglo Gold Ashanti Tropicana, Sandfire Resources NL, Iluka Resources, Talisman mining, Creasy Group

Voskhod chromite mine (Kazakhstan – Oriel Resources), Frasers gold mine (NZ – OceanaGold); Jabil Sayid copper project (Saudi Arabia – Citidel Resources); Telfer gold mine (Newcrest); Jundee gold mine (Newmont); Cosmos nickel mine (Xstrata); Sinclair nickel mine (Xstrata); Mt Gordon copper mine (Aditya Birla); Agnew Gold Mines (Gold Fields); Kencana gold mine (Indonesia – Newcrest); Munali nickel mine (Zambia – Albidon resources); South Deep gold mine (South Africa – Gold Fields); Athena gold mine (Gold Fields)

amm JUNE 2012

111


AustrAliA’s

Contract Miners & Drillers

ExClusivE survEy

2012

Based

Established

Ownership

CEO/MD

Business contact number

Business focus

DITCHFIELD CONTRACTING PTY LTD Lot 8 Dee Crescent, Tuncurry NSW 2428

1994

Private

Warren Ditchfield

02 65559111

Contract mining

DOWNER EDI MINING Level 7 SW1, 104 Melbourne Street, South Brisbane Qld 4101

1921 (inc 1928)

100% owned by Downer EDI Limited

David Overall

07 3026 6666

Open-cut and underground mining; blasting services, including explosives manufacture and supply (through subsidiary Downer Blasting Services); exploration drilling; tyre management (through subsidiaries Otraco International and Rimtec); mobile plant maintenance; mine planning and design; construction of mine-related infrastructure; rehabilitation; Indigenous training and development; low-emissions mining solutions

>5,000

DOWNHOLE SURVEYS Perth WA, Kalgoorlie WA

1989

Privately owned

Michael Ayris

08 9250 1827

Directional surveying, rental sales and services

40

DRILLING AND GROUTING SERVICES 1 Kew Street, Welshpool WA 6106

Warren Symons

08 9361 3200

Drilling and grouting contractors and consultants, with supply of an extensive range of specialised equipment and technical expertise. Integrated services suited to the challenge of any major construction, mining, marine and infrastructure development

DRILLWEST 47 Helen St, Bellevue WA 6056

1987

Private company

Rod Pearce

08 9274 2211

Exploration and production

>30

EASTERNWELL Offices in Brisbane, Toowoomba, Perth, Melbourne and Alice Springs

Easternwell Group 1976, Australian Drilling Solutions 2008. Easternwell Group and Australian Drilling Solutions announced their merger in January 2010. Easternwell is now a part of Transfield Services.

Troy Campbell

07 3270 7400

Well servicing and maintenance activities, coal seam gas (CSG) drilling, coal exploration and production drilling, iron ore exploration and grade control drilling, productionrelated iron ore mine dewatering backfill drilling, and near-shore geotechnical drilling.

1100

EXACT MINING SERVICES 43 Greenhill Road, Wayville SA 5034

1997

Privately owned

Greg Rhodes

08 8372 1100

Civil and mining contractor for open pit mining, civil earthworks, quarry management, backfill and drill and blast with services in crushing and screening, tailings dam construction, earthworks as well as shotcrete and concrete supply, both on the surface and underground

FOX MINING & ENGINEERING PO Box 2243, Gateshead DC NSW 2290

Christopher Fawcett

02 4904 9900

Supplying mining and tunnelling equipment and services, with extensive skill in metalliferous and coal mining areas

GBF UNDERGROUND MINING COMPANY Level 1, 460 Roberts Road, Subiaco WA 6008

1988

Privately Owned

Michael Foulds

08 6382 4000

GBF’s core business is underground mining and industrial services

GENERAL UNDERGROUND SERVICES PTY LTD PO BOX 3092, Bowenfels NSW 2790

2002

Privately owned

Charles Body

02 6355 7588

General Underground Services brings together a diversified family of business operations specialising in providing services to the mining industry

GOLDING CONTRACTORS PTY LTD PO Box 1643, Milton BC QLD 4064

1942

Private

Geoff Caton

07 4976 0400

Surface development/mining, civil

1100

HUGHES DRILLING LIMITED QLD; Regional Offices – Cobar, Rutherford, Mackay

1994 (listed on ASX 29 June, 2007)

Publicly listed

Andrew Drake

07 3807 8811

Production drilling, surface exploration drilling, sales of ancillary drilling equipment, sale of production drilling rigs

~200

IMPACT DRILLING PTY LIMITED 31 Industrial Dr Sunshine West VIC 3020

1999

Jeminex Group

Impact Drilling general manager – Rodney Krins

03 9310 2011

Impact Drilling is a quarry and surface-mining drilling company that has successfully operated in many of the quarry and mine sites across Victoria, Southern NSW and SA, offering a range of quality drilling and blasting services by a team of highly experienced personnel. The company has expanded to serve the construction industry, working on major infrastructure and Freeway projects across Victoria and NSW. In addition we have also successfully completed drilling projects in relation to rehabilitation of worked out and completed quarry sites. Blasting services are also offered for all clients, delivered by trained industry experienced shot firers whom are highly experienced personnel. In addition to blasting services we also offer environmental monitoring for air blast and ground vibration

112

No. of employees

350+

JUNE 2012 amm


es

AustrAliA’s

Contract Miners & Drillers

ExClusivE survEy

2012

2010-2011 revenue/ turnover

Forecast 2011-2012 revenue/turnover

Work in hand (current order book value)

Equipment fleet (current value)

Major contracts (current)

$1.5 billion

Approximately $7 billion

Approx. $700 million

MINING (including mining and mobile plant maintenance contracts). QLD: Commodore open-cut coal, Cracow underground gold, Goonyella Riverside open-cut coal, Millennium open-cut coal. NSW: Boggabri open-cut coal, Wambo open-cut coal. Vic: Latrobe Valley open-cut coal. WA: Argyle open-cut diamonds, Christmas Creek open-cut iron ore, Karara open-cut magnetite, Paraburdoo open-cut iron ore, Sunrise Dam open-cut gold. New Zealand: Stockton open-cut coal. EXPLORATION DRILLING. PNG: Ok Tedi open-cut copper, Highland Pacific open-cut copper-gold. BLASTING SERVICES. QLD: Blackwater, Ensham, Goonyella Riverside, Jellinbah, Millennium, Minerva, Moolarben, Peak Downs, Yarrabee. NSW: Ashton, Boggabri, Cullen Valley, Moolarben, Mt Arthur, Pine Dale. SA: Leigh Creek. TAS: Savage River. WA: Carosue Dam, Christmas Creek, Cloud Break, Karara, Mt Cattlin, Murrin Murrin, Premier. TYRE MANAGEMENT. QLD: Century Zinc, Goonyella Riverside. NSW: Cadia, Cowal, Wambo, Whitehaven. WA: Argyle, Brockman, Cape Preston, Channar, Hope Downs, Marandoo, Mt Keith, Mt Whaleback, Pannawonica, Paraburdoo, Sunrise Dam, Super Pit, Telfer, Tom Price, West Angelas, Yandicoogina. South Africa: Kolomela, Mogalakwena. South America: Cerro Colorado, Escondida, Ministro Hales, Radomiro Tomić New Zealand: Stockton

Territory Iron, Saracen Gold, Regis Resources, Independence Group

WA: Norseman (crushing and underground grading); Telfer (ore haulage and site rehabilitation). SA: Olympic Dam (earthworks expansion, shotcrete and tailings dam embankment projects); Kanmantoo ( mine site establishment, access road construction, open pit mining, ore crushing, tailings dam construction); Jacinth mineral sands (dry mining process operation and mine site rehabilitation); IMX Resources Cairn Hill (mine site establishment, haul road construction, open pit mining, ore crushing, ore haulage and rail loading). QLD: Kagara backfill project. NSW: Bemax Snapper and Ginkgo(overburden mining and ore haulage); Unimin Tallawang paste fill project

MMG – Golden Grove – Scuddles (whole of mine contract); Goldfields Australia – St Ives – Argo (whole of mine contract); Goldfields Australia – St Ives – Cave Rocks (whole of mine contract); Cortona Resources – Dargues Reef (whole of mine contract and corporate services); Loader retrieval services at various locations

Ensham, BMA Gregory, BMA Blackwater, Kogan Creek, Mt Rawdon, Phosphate Hill, Curragh Coal Mine

$80 million (plant & equipment) as at Dec 31 2011

Peabody (Nth Goonyella, Wambo, Millenium, Wilkie Creek), Leighton Contractors, BMC (Poitrel), Q Coal (Sonoma), Newcrest Ming (Cadia East)

Jeminex Group (Impact Drilling, Addrill and Pacific Drill & Blast) currently have drill and blast crews working at multiple locations including mines, quarries, and construction projects through Victoria, South Australia, ACT, New South Wales, and Queensland

amm JUNE 2012

113


AustrAliA’s

Contract Miners & Drillers

ExClusivE survEy

2012

Based

Established

Ownership

CEO/MD

Business contact number

Business focus

No. of employees

LEIGHTON CONTRACTORS MINING DIVISION Perth, Western Australia

1949 (Leighton Holdings)

Leighton Contractors is a wholly owned subsidiary of the Leighton Holdings Group

Leighton Contractors Mining Division executive general manager Steven Keyser

+61 8 9389 4777

Leighton Contractors Mining Division is an Australian mining leader. We run one of the largest fleets of mining equipment and have more than 4,000 people delivering mining and mine services across a full range of world-class projects. Our expertise encompasses everything from mine planning, site and project logistics to materials handling, ore processing, engineering, construction, operation and maintenance of sites.

4,000

LUCAS EARTHMOVERS PTY LTD Darlington South Australia

1969

Co-directors – David and Vivienne Lucas , general manager – Ben Lucas

08 8179 4000

contract mining, civil works, quarrying, crushing, infrastructure , plant hire, bulk material supply, haulage, site remediation, waste management, FIFO services

Over 200

MACA LIMITED PO Box 625, Welshpool WA 6986

2002

Publicly listed

Chris Tuckwell

08 9351 8488

Load and haul, drill and blast, crushing and screening, crusher feed

over 500

MACMAHON HOLDINGS LTD Level 3, 27-31 Troode St, West Perth WA 6005

1963

Publicly listed

Nick Bowen

08 9232 1000

Contract mining and construction company with operations throughout Australia and overseas. Operations include surface and underground mining, construction, engineering and plant maintenance

4600

MAJOR DRILLING QLD (Major Pontil) 42 Suscatand St, Rocklea QLD 4106

1976 (Major Pontil)

Major Drilling Group International

Francis P. McGuire (Major Drilling Group International)

07 3850 4750

Surface/underground exploration/production drilling/ pilot-hole drilling

500

MANCALA PTY LTD 19A Hampshire Rd, Glen Waverley VIC 3150

1990

Pty Ltd

Martin Kyne / Bill Lannen

03 8562 9400

Shaft sinking and raise boring – mine management and mine operations, equipment hire and service, specialised labour hire

160

MAXFIELD DRILLING 30 Caroline Street, East Devonport Tas 7310

25yrs

Mick Maxfield

03 6427 8240

Production drilling – surface and underground, remote drilling (Roc L8), civil construction

40

NGARDA CIVIL & MINING PTY LTD 185 Great Eastern Highway, Belmont WA 6104

2000

Ngarda Ngarli Yarndu Foundation, Indigenous Business Australia and Leighton Contractors

General manager – Darren Lundberg

08 6272 5000

Ngarda Civil & Mining is one of the largest Indigenous owned and operating contracting companies in Australia, providing earthmoving, civil engineering and contract mining services to the resources and construction sectors

More than 350 people

NRW HOLDINGS LIMITED 181 Great Eastern Highway, Belmont WA 6104

1994 (listed on ASX on 5 September, 2007)

Publicly listed

CEO – Julian Pemberton

08 9232 4200

Civil and mining contracting; drill and blast; concrete installation; maintenance and fabrication

>3700 (December 2011)

OZLAND DRILLING AND BLASTING SERVICES Unit 2 / 52 Erceg Road, Yanchep WA 6164

2010

Private

Greg Morris director – operations, Kevin Fitzgerald director plant and equipment

08 9434 9440 and enquiries@ozlanddbs. com.au

Professional drilling and blasting services to mining and civil construction industries

PYBAR MINING SERVICES Australia / National service with operations in NSW, WA, QLD, VIC, TAS

1995

Private

Paul Rouse

02 6361 4499

Australia-wide delivery of high-speed, cost-effective underground development and production mining, with specialist services in shotcreting, production drilling, cable bolting, electrical and engineering. Surface and civil – including tailings dams, bulk earthworks and haulage. Plant hire – extensive national fleet of surface and underground plant.

1000+

RAISEBORE AUSTRALIA PTY LTD Adelaide, South Australia

1995

Private Company

Rod Bertram

08 8358 4444

Raiseboring

50

REDPATH AUSTRALIA Qld and WA

1968

The Redpath Group

Rob Nichols

07 3868 5000

Underground development, mining and construction, shaft sinking, raiseboring (metalliferous, coal and civil sectors)

600

ROCK AUSTRALIA MINING + CIVIL 3 Craig St, Burswood WA 6100

1986

Wholly owned subsidiary of ASX listed Structural Systems Ltd

Roy Coates

08 9472 2100

Drilling and Blasting – blast hole, presplit, depressurisation, dewatering, RC sampling, ground support, soil nails, technical access, high reach, ground anchors & civils; Geotechnical Services – rockfall protection, slope stabilisation, cable bolting, rock bolting, meshing, shotcrete, TSOL, instrumentation, radar monitoring, soil & ground anchors; Environment – erosion control, water management

250+

RUC CEMENTATION MINING CONTRACTORS PO Box 2378, Boulder WA 6432

2004

Murray and Roberts International

Barry Upton

08 9021 7777 (fax: 08 9021 3333, email: raisebore@ ruc.com.au)

Raise boring, shaft sinking and underground development/ construction

250

114

JUNE 2012 amm


es

1)

AustrAliA’s

Contract Miners & Drillers

ExClusivE survEy

2012

2010-2011 revenue/ turnover

Forecast 2011-2012 revenue/turnover

Work in hand (current order book value)

Equipment fleet (current value)

Major contracts (current)

Dawson North (Anglo American Metallurgical Coal Pty Ltd); Duralie (Gloucester Coal Ltd); Moorvale (Peabody Energy); Peak Downs (BHP Billiton Mitsubishi Alliance); Poitrel (BHP Mitsui Coal Pty Ltd); Sonoma (Sonoma Mine Management Pty Ltd); Challenger (Kingsgate Consolidated Ltd); Cosmo Deeps (Crocodile Gold Australia Operations Pty Ltd); Favona (Newmont Waihi Gold); Telfer (Newcrest Mining Ltd); Wattle Dam (Ramelius Resources Ltd); Cockatoo Island JV: HWE Cockatoo Pty Ltd and Cliffs Asia Pacific Iron Ore Pty Ltd; South Middleback Ranges (OneSteel Manufacturing Pty Ltd)

���

$249 million

$1.4 billion contracted (December 2011)

Kimberley Diamond Company, Atlas Iron, Crosslands, Sinosteel Midwest Corporation, Barrick, Magellan Metals, Regis Resources, Crescent Gold, Western Areas, Onesteel

$1.3 billion

$3.4 billion at April 2012

$311 million plant/equipment (FY 2011)

Range of projects for clients including BHP Billiton, Rio Tinto, Fortescue Metals Group, Main Roads WA, JKC Joint Venture, NT Government, Lafarge, Newcrest, Newmont, Yancoal, Peabody, NSW State Water, Government of South Australia, Australian Government

$50 million +

$80 million +

$15 million

Two mine management contracts, several shaft sinking operations scheduled over next 12 months together with a number of raise bore shafts in Australia and PNG

>$700 million

$1.67 billion

$297.5 million ( property, plant & equipment 1HY12)

Civil – Rio Tinto, Chevron, BHP Billiton, Westnet Rail, Karara, Fortescue Metals, Main Roads WA, MMG, BMA; Drill and Blast – Downer EDI, Macmahon, Karara, Talison Lithium, HWE, BMA; Mining – Rio Tinto, Karara, Fortescue Metals Group, OM Holdings, Middlemount Coal

$200 million +

$220 million +

$300 million +

$80 million +

NSW: Cadia Valley Operations, Northparkes Mines, Mineral Hill Mine, CSA Mine, Peak Gold Mine, Hera project. VIC: Ballarat Gold. QLD: Mount Isa Mines, Lady Loretta Project, Osborne Mine. WA: Argyle Mine, Red October Mine. TAS: Rosebery Mine

12 raiseborers to ream raises from –.5 to 5.5 metres in diameter and up to 1000 metres in depth

Cannington Mine (Qld); Ok Tedi Mine (PNG); KME Project (Qld); Mt Lyell Mine (Tas) and Raiseboring (various sites)

$82.6 million

$85 million (December 2011)

BHP Billiton, Rio Tinto, Newcrest Mining, Barrick Gold, Newmont, Mt Gibson Iron, SCT, BMA, CST Minerals, Fortescue Metals, Consolidated Minerals sand QLD Rail

$100 million

$35 million

Cadia raise drilling, Goldfields – St Ives, Xstrata – Cosmos and Mt Isa George Fisher

amm JUNE 2012

115


AustrAliA’s

Contract Miners & Drillers

ExClusivE survEy

2012

Based

Established

Ownership

CEO/MD

Business contact number

Business focus

No. of employees

SHAW CONTRACTING PTY LTD TAS/Northern Territory

1945

Private Company

John Lamb

(03) 6397 0222

Open cut mining; civil contracting

140

SPECIALISED MINING SERVICES Unit 8, 26 Grandlee Drive, Wendouree VIC 3355

Louis Van Der Merwe

03 5339 1179

SMS has recognised expertise in shaft sinking, tunneling and construction, specialising in mine services support work for underground projects within both hard-rock and coal mines. Services includes water sealing, ground consolidation, cavity filling, ground support, gas sealing, underground ventilation systems utilising unique and new products developed specifically for mining, tunnels and construction applications

STOLZENBERG DRILLING 4 Bruce Highway Gympie QLD 4570

1970

Kevin Stolzenberg

Kevin Stolzenberg

07 5482 5924

Owner-operator Kevin Stolzenberg started his company over 30 years ago and has a versatile range of drilling capabilities, providing domestic, stock or irrigation bores using hammer rotary air and rotary mud methods, and mineral exploration using RC hammer and diamond coring

STRATACRETE PO Box 1073, Cleveland QLD 4163

Alby Loncaric

07 3206 0892

Stratacrete P/L is a leading mining and civil shotcrete contractor specialising in robotic placement for both underground and surface operations throughout Australia and selected international markets

SWICK MINING SERVICES 64 Great Eastern Highway, South Guildford WA 6055

1997

Public listed company

Kent Swick – MD

08 9277 8800

Underground and surface drilling services – specialist in underground diamond, underground longhole, surface RC drilling services

550

THIESS PTY LTD Level 7, 189 Grey Street, South Bank Qld 4101

1933

Subsidiary of Leighton Holdings Limited (ASX:LEI)

Bruce Munro, managing director

07 3002 9000

Construction, mining and services

17,000

UGM ENGINEERS PTY LTD 91 York Street, Teralba NSW 2284

1997

Private company

Paul Hartcher

02 4941 7500

Underground coal mining contractor, specialising in mine development, secondary support, conveyor installation. Diesel service division services underground plant workshops in Teralba, Mackay, Mudgee and Gunnedah. Project management into coal, power, rail and port. Backfill business into coal and civil

700

UME AUSTRALIA PTY LTD 116-132 Marong Road, Bendigo Vic 3550

1993

Private

Stephen Bryant

03 5441 2855

Production drilling, raiseboring /slot drilling, drill rig and equipment refurbishment

80-100

V M DRILLING PO Box 4422, Kalgoorlie WA 6433

2004

Matthew May and Chirstopher Vollmer

08 9093 3916

VM Drilling work Australia wide, specialising in: remote track-based exploration to 800m, resources definition, grade control, water bores, booster and auxiliary; tyre-mounted exploration to 300m, resources definition, grade control, booster and auxiliary; blast holes – pre-split 102mm 30m vertical, trim buffer 102m 165mm, production 165mm, de-watering and decompression holes; manufacturing TJM hands-free breakout unit, VM cyclone system and supply of a majority of the wearable sample system consumables required in the drilling industry

65

WALLIS DRILLING 54 Beaconsfield Avenue Midvale WA 6056

1964

Mark Crumby

08 9374 1111

Contract drilling services including reverse circulation drilling, Wallis aircore drilling, diamond core drilling and grade control and blast hole drilling, all of which are suitable for mine based or remote exploration work

180

WATPAC CIVIL & MINING Head Office in Brisbane, with regional offices in Townsville, Adelaide, Melbourne and Perth

2008

Part of the Watpac Group

Greg Kempton, managing director

07 3251 6300

Mining and civil services, including bulk earthworks, opencut mining, drill and blast, road works, bridges, coastal and port infrastructure, civil landscaping, dams and storage basins, and commercial infrastructure

500

WDS – MINING DIVISION WDS Mining division – 75 Main Street, Kangaroo Point Qld 4169; WDS Limited – NSW

Mining division commenced in 1994

WDS Limited

Terry Chapman – WDS CEO/MD; Wayne Bull – chief executive mining

07 3292 0800

WDS’ Mining Division is Australia’s largest and most fully integrated underground coal mining services contractor with ground support, tunnelling and engineering services also provided to the civil and hard rock sectors

WESTDRILL 6 Hodgson Way, Kewdale WA 6105

2005

Private

Myles Anderson

08 9355 2300

Drill & Blast and associated services.

40

WILSON MINING SERVICES PTY LTD 16 Metro Court, Gateshead NSW 2290

1990

Jeffery Blunt – CEO, David Wilson – MD

02 4904 8222

Contracting work for the underground coal mining industry with specialised areas identified as a focus for long term operations. These include underground drilling, supply and installation of underground ventilation control devices, the installation of secondary support systems including polyurethane injection, fenoflex injection and cavity filling

100

116

11-20

JUNE 2012 amm


es

AustrAliA’s

Contract Miners & Drillers

ExClusivE survEy

2012

2010-2011 revenue/ turnover

Forecast 2011-2012 revenue/turnover

Work in hand (current order book value)

Equipment fleet (current value)

Major contracts (current)

$65 million

$75 million

$65 million

$10 million

Savage River (Tas), Waratah open pit, Renison open pit, Roseberry underground, Ranger Mine NT

$100 million

$135 million

approx $200 million

59 mobile underground diamond rigs in the fleet. 7 RC rigs; 5 Longhole rigs; $100 million asset value.

Newmont (6 rigs at Jundee and 6 rigs at Granites), Gold Fields (6 rigs at St Ives and 2 rigs at Agnew).

$1.5 billion (Thiess Australian Mining)

$1.9 billion for 2012 calendar year (Thiess Australian Mining)

As at 31 Dec 11 was $4.6bn (Thiess Australian Mining)

$2 billion replacement value

Burton Coal Operations, Qld; Collinsville Mining Operations, Qld; Curragh North, Qld; Lake Vermont Project, Qld; Liddell Open Cut Mine, NSW; Mt Owen, NSW; Prominent Hill, SA; South Walker Creek Mine, Qld; Tarong Meandu Mine, Qld; Wilpinjong Coal Project, NSW; Chitarpur Coal Project, India; Kaltim Prima Coal Mine, Indonesia; Melak Coal Mine Project, Indonesia; Satui Coal Mine, Indonesia; Senakin Coal Mine, Indonesia; Tabang Coal Processing Project, Indonesia

$125 million

5 continuous miners $12 million, 18 LHD $10 million, 20 Mantransporters $4 million, 1 roadheader $3.5 million, 8 concrete pumps $3 million, 4 bolters $1 million

2 umbrella contracts, 3 mine drivage contracts, 2 Conveyor installations, 2 Care and maintenance, 4 conveyor maintenance crews, 5 backfill contracts

Fosterville Gold Mine (Vic), Bendigo gold Mine (Vic), Olympic Dam (SA), Mt Isa (QLD), Ravenswood (QLD), Mt Isa Mine(QLD)Ernest Henry Mine (QLD) Kaggara Mine (QLD) Osborne Mine (QLD)

$320 million

$750 million (December 2011)

Pajingo Gold Mine – Evolution Mining, Mt Magnet – Ramelius, Nullagine mining project – BC Iron, Iluka Resources (Tuttenup South, WRP (Victoria), Douglas (Victoria))

$183 million

$130 million (HY2012)

Integra Underground Mine – Vale, Austar Coal Mine – Yancoal Australia, Blakefield – Xstrata, Metropolitan Colliery – Peabody, NRE #1 Colliery – India NRE Minerals, Tahmoor Colliery – Xstrata, West Cliff Collieries – BHP Billiton, North Goonyella Mine – Peabody, Oaky Creek Project – Xstrata, Broadmeadow Mine – BMA, Cadia East Mine – Newcrest

$9.5 million

$14 million

$50 million

$15 million

Laverton Gold, Poondano Iron Ore, Phil’s Creek Iron Ore, Murrin Murrin Nickel, Agnew Gold

amm JUNE 2012

117


News

Tackling the issue Miners working in New South Wales are urged to seek help for mental health issues. By Brooke Showers

T

he New South Wales mining industry is urging workers to tackling mental health issues. Employee mental health was the focus of discussion at the NSW Minerals Council’s 2012 Occupational Health and Safety Conference, held in the Hunter Valley. Awareness of mental health issues amongst miners started to gain attention around Australia last year, as many miners scrambled to lift their OHS policies when it came to employee well being. The NSWMC launched a paper at the conference which recommended approaches to tackling mental health and illness. The paper, titled Roadmap for Mental Health revealed an average between 8,000 to 10,000 employees experience mental

health illness such as anxiety, depression or substance abuse over a 12 month period. The Roadmap to Mental Health paper was prepared by the University of Newcastle and the Hunter Institute of Mental Health, through Newcastle Innovation and revealed all mining employment categories are affected equally. Mental health impacts on the workforce lowers productivity, increases absenteeism and costs the industry up to $450M per year. NSWMC chief executive officer Stephen Galilee said mining companies were doing a good job of managing mental health at an individual level. But he argued that now is the time to consider a collaborative, industry-wide effort. “Cultural impediments like the old macho

mining culture, the ‘we’re tough, this doesn’t happen to us’ mentality needs to be swept away,” Galilee said. The NSWMC is providing drug and alcohol advice, running stress management workshops, mental awareness sessions and supporting men’s sheds. The NSWMC is urging the mining industry to manage mental health concerns collectively and form solutions together. “We have the policies in place, but we need to consider ways to link them into a wider strategy,” Galilee said. “There is no single solution to mental health. It requires a strategic and comprehensive approach.” brooke.showers@aspermont.com

Professional Drilling & Blasting services

Unit 2, 52 Erceg Road, Yangebup WA 6164 Phone+61 (8) 9434 9440 enquiries@ozlanddbs.com.au

www.ozlanddbs.com.au

Ozland is a Western Australian owned drilling and blasting service provider for open pit mining and civil construction projects. Ozland’s personnel have a substantial depth of experience within the mining and civil construction industries in providing safe and professional drilling and blasting services. Ozland currently provides the following services: • Top Hole Hammer Drilling – 76mm to 140mm • Down Hole Hammer Drilling – 115mm to 216mm • Blasting – Full down hole service

118

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GEOTECHNICAL

14th July 198 6

25 YEARS

Thinking outside the square in ground support and control systems

2011

Highly experienced. Client focused. Rock solid.

2011

WINNER

CONTRACT MINER OF THE YEAR

www.rockaustralia.com.au PERTH | KALGOORLIE | MELBOURNE | BRISBANE | TOWNSVILLE

14034 A4


Australian Made

Steam clean CLEANING equipment experts Australian Pumps has launched its latest range of portable pressure cleaners. The latest Scud 400 range has an engine drive with 4000 pounds per square inch of pressure and is suited to cleaning plant and mining equipment. “If you want to get dirt off a piece of earthmoving plant fast before you service it or move it off site, the Scud is the way to go,” Australian Pumps sales manager Dean Fountain said. Its frame is designed with a steel construction, with tie down points and a lance holder. When teamed with an Aussie Turbo Lance, the Scud 400 can supply 6400 pounds per square inch. The lance multiplies the effectiveness of the cleaner without making it work harder. “The Turbo [Lance] delivering 6400psi of effective working pressure, blows mud, dirt and concentrated build up cake dust from oil leaks, away in seconds,” Fountain said. The operator can configure the machine’s settings to suit specific applications. The Scud 400 can be equipped with an integrated lifting bar, for use onsite, or is available in a Mine Spec version, which has a Yanmar diesel engine and can be fitted with a 50m high pressure hose. The system has a Big Berty Bertolini pump that incorporates ceramic pistons, rapid action check valves and high temperature seals.

Australian Pumps sales manager Dean Fountain with the company’s latest range of pressure cleaners.

Safely rolled ACG Seventh International Conference on Mine Closure 25–27 S ep t emb er 2012, Sof i te l Br i s b a n e C en t r a l, Australia Early bird registration expires 13 August 2012

At Mine Closure 2012, delegates will exchange views and expertise with their peers participating in the diverse range of mine closure disciplines: geotechnical, environmental, social, financial and regulatory. For details and to view the list of more than 100 accepted abstracts visit: www.mineclosure2012.com

Principal Sponsor

w w w. m i n e c l o s u r e 2 0 1 2 . c o m 120

AUSTRALIAN manufacturer ReCoila has redesigned its hose reels to meet occupational health and safety standards. ReCoila, based in Kings Park, west of Sydney, produces a range of hose cord and cable reels for industries including mining, electrical, and pressure washing. ReCoila latest hose reel range, the T-Series, has been designed based on Safe Work Australia’s safe design guidelines. This best-practice guideline is suitable for manufacturers and designers of plant, equipment and buildings. It has been developed to eliminate hazards relating to product design and the duration of a product’s lifespan. “We have been touting ReCoila hose reels as a safety solution since day one but this takes it to a whole new level,” ReCoila managing director Michael Pawson said, “It is great to see a standardised framework in place that will raise the bar for manufacturers in Australia and gradually weed out any intrinsically unsafe products.” The T-Series has an electric motor-driven hose reel and is designed with a compact and rugged chassis. Its reels are welded and fabricated with a heavy gauge steel plate for strength. T-series offers optional fluid path construction materials and right or left hand configurations. Stainless steel, aluminium and powder-coated steel reels can be customised to suit individual needs Optional pressure ratings are available with a limit ranging to 10,000 pounds per square inch. vetti.kakulas@aspermont.com

JUNE 2012 AMM


Australian Manufacturer Delivering Quality Enclosure Solutions

Enclosure Solutions for: • Mine Infrastructure • Road, Rail & Port Infrastructure • Process & Motor Control • Hazardous Area Electrical Equipment • Telecommunication Infrastructure

tralian Ma us

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www.brenclosures.com.au


What’s New

GE is watching TECHNOLOGY and innovation experts GE have released a range of rugged vehicle displays, suitable for the mining industry. IVD2010 has a 264 millimetre screen and the IVD2015 has a 380mm screen. Both have an Intel Core 2 Duo processor that operates at 2.25 gigahertz and a 96-core NVIDIA GT 240 graphics processing unit. The four video inputs have a four gigabyte memory and can all be viewed simultaneously by the user on the display unit in panoramic view. “The IVD2010 and IVD2015 are the first in a planned family of intelligent vehicle displays that will take advantage of GE’s extensive

experience in ruggedisation, thermal management and long term product support,” GE Intelligent general manager military and aerospace products Rod Rice said. These display units were originally designed for the US army and combat vehicles. “With the incremental modernisation programs currently being undertaken by the US army, they represent a cost-effective, low risk option to upgrade a broad range of invehicle displays,” Rice said. Other features include an LED screen for sunlight readability and MIL-STD-3009 night vision imaging system, and a multi-touch resistant touchscreen.

GE’s latest IVD2010 vehicle display.

Tough phone

Maternity wear for the miner.

High-vis bump THE WOMEN in Engineering National Committee has released a range of personal protective clothing for women working in the mining and resource industry. This range includes four prototype shirt and pant sets to suit a woman’s shape – including a maternity range. Protective clothing designer Michelle Olufson said conventional clothing was unsuitable for some women. “Many girls had a problem with shirts gaping out from their bust, so we developed a shirt with tab fronts, like a polo shirt, so they really only have two buttons. We have also put the pockets on the sleeves to take emphasis off the bust.” The women’s range was launched at the International Conference for Women Engineers and Scientists in Adelaide. The personal protective clothing was developed as a pilot range with contracting and engineering services company John Holland.

122

A RUGGED phone has been launched that works Australia-wide and even offshore. The XT-Dual handset by Thuraya is distributed by Indigo Telecom and weighs just 211 grams. “By current standards, the new XT-Dual handsets are by far the toughest dual mode phone Australia has ever seen,” Indigo Telecom chief executive officer David Ruddiman said. The XT-Dual device can switch between two settings, global system for mobile communications and satellite, this finds a network wherever you go. When the user moves to an area without GSM coverage they can switch to the Thuraya satellite network.

XT-Dual’s outer casing is made from hitech polycarbonates and is wrapped around an internal aluminium frame. This protects the internal circuitry from knocks. Rubber seals on all the external plugs help keep water and dust out. The phone has GPS waypoint navigation and tracking capabilities, with a special SOS alerting feature that sends an emergency message to predefined numbers. Users can activate this at the touch of a button. XT-Dual has a battery talk time in satellite mode of six hours and 11 hours in GSM mode. It has a 320 megabyt internal memory of 320 and an external memory of 2 gigabytes.

O2 watch MANUFACTURER of moisture sensors and analysers, Michell Instruments, has introduced its latest range of oxygen analysers. The XTP601 oxygen analyser is suited to biogas plants, underground mining and monitoring blanketing gases in oil tankers. It has been designed based on the thermoparamagnetic senor and measures oxygen levels in background gases ranging from 0-1% and 0-25%, and suppressed zero ranges, 90-100%. The XTP601 oxygen analyser has three settings that users can choose based on their preferences and budget. These include a blind transmitter version, a transmitter with LED statuses and a full display analyser, with a touch screen interface. All options can be rated by the user for safe or hazardous areas, and its menu provides

A oxygen analyser for underground mining.

information on oxygen concentration, analyser status and oxygen trends. Software is available for the XTP601 that allows users to monitor and operate the oxygen analyser from their PC or control system.

JUNE 2012 amm


What’s New

Surveyor service TOPCON Positioning Systems has launched two reflector-less station series for surveying. The ES and OS series introduces five features designed for faster surveying and greater accuracy, compared to its predecessors. Both series have a non-prism operating distance of 500m, and 4000m within a prism. The OS series features Topcon’s on-board MAGNET Field application software, which is based on Microsoft Windows’ CE6 computer. With the reflector-less mode switched on the OS and ES total station can survey dark and wet surfaces at a 500m range. This is suitable for coal mine applications, wet pavements and dark roof areas. Topcon said it was the fastest electronic distance measurement rates on the market. Its LongLink technology using Bluetooth means users do not need a radio and can remain at the pole to take measurements 300m away. The narrow beam feature on the station series allows users to measure tight corners and thin objects, including wires. This feature can measure beyond chainlink fences saving the user time by not having to navigate the fence. The ES and OS reflector-less mode have a 0.9 second measurement time for 500m and in standard mode, 4000m. These devices are water and dust proof. The ES has a battery life of 36 hours. Sporadic use of the converter means the user does not need to recharge for five days.

Companies & organisations in this issue ABB ABN Amro Bank NV Active Risk Adani Group Adani Mining Alcoa Ambre Energy A. Noble & Son Argonaut Aurecon Ausgroup Atlas Iron AVL International

Bradken 10 Bass Metals 43 Becrypt 6 BGC Contracting 107 BHP 4, 13, 15, 29, 31, 33, 35, 43, 66, 104, 106 BLH Group 43, 44 Burey Gold 6 Cameco Carpentaria Citigroup Comacchio Commissioners Gold Credit Suisse Crushing Services International Cummins Dart Energy Dart Mining Dassault Systemes Deadline Draig Resources Drillbit Drillsearch Australia DuPont Sustainable Solutions Felton CTL Finders Resources Fortescue Metals Group

Gemcom Goldman Sachs

6 45, 47 68 10 6 10 51 100, 102, 103

22 17 4, 10, 13, 16, 17, 25, 35, 38, 39, 40, 124 68 66, 67

33

Mermaid Marine

20

Michell Instruments Mineral Resources Mincom

10 10

Mount Gibson Iron

6

Murchison Metals

6

New Hope Corporation

22

Nitro Drilling

51

Orange Business Services

100

Otraco International

96, 97

Parker Hannifin

98, 99

Polaris Metals

33

Qantas

31

Queensland Resources Council

23

R Group

10

Raisebore

6

Recoila

120

Redstar Equipment Reed Mining Events Remote Control Technologies Rio Tinto

52 50, 52, 71 84

4, 6, 13, 25, 35, 37, 67, 93, 94

Rockwell Automation Royal Bank Of Scotland

73, 81 6

RT Systems

54

Sandvik

4

Sew-Eurodrive Sino Iron SKF St George Mining Thiess

74, 76 124 18 6 106

Terex

8 8

6 17

Thuraya

Toro Energy

University Of Western Australia

Ventyx 104, 106 Vermeer 73 10, 107 6

10 78, 80

Morgan Stanley

IronClad Mining Iron Ore Holdings

Macmahon Holdings Matilda Zircon

122

Monadelphous Group

58

4

15

Meridian Engineers

Hyundai

Leighton Holdings Loy Yang Power

amm JUNE 2012

16 6 34 51 6 13 33 58

Mega Uranium

Terrequipe

Komatsu

A reflector-less station series for surveying.

78, 80 6 6 24 2 88, 91 6 60 6 6 6 107 83

Wormald Winmar Resources

15, 16 122 37 78, 80 4 87 6, 17

123


Viewpoint

dryblower

editorial@miningmonthly.com

Slow projects to hit supply Sino iron, the chronically over-budget and spectacularly overdue iron ore processing plant on Australia’s northwest coast, is destined for a mention in the Guinness Book of World Records, though Dryblower suspects it might one day have competition. For anyone who has followed the sorry saga of Sino iron, which started out as a $2.5 billion project and looks like costing around $7 billion, the suggestion of a rival for the “botched budgeting” award seems unlikely. nor does it seem feasible that a project which was supposed to have started production in late 2009, but now has the end of 2012 as completion date, could ever be beaten for the “exploding timetable” trophy.

Every delayed project, doubled budget, and mothballed new mine boosts the new force in global commodity markets – supply. But if you look around the mining world today it is littered with over-budget, slowmoving projects. And while that is giving the engineering, design, and construction industries a bad name, it might not be bad news for miners. Why is this so? Because every delayed project, every doubled budget, and every mothballed new mine means that the new force in global commodity markets gets another boost – and that force is called supply. More specifically, it is supply shortages, caused by the failure of new projects to leave the drawing board, attract the required capital or successfully negotiate the increasingly impenetrable maze of government regulations. The global go-slow in mining projects has not yet been widely recognised as a factor in commodity markets but it soon will be if the comments made at a copper conference in Chile last month are a guide. According to Codelco, Chile’s state-owned copper producer, a simple change in the use of water in that country could add substantially to operating costs in the world’s top copper

mining country. Codelco reckons that a new government regulation banning the use of fresh water in copper processing will add 2030% to overall copper costs. The reason for that shock increase is that all new copper mines will need to install seawater desalination plants or figure out a way to use seawater in their processes. But, as well as needing to find new sources of water, copper companies in Chile are also facing sharply higher electricity costs and rising labour rates. Water, however, is the immediate threat, and the fact that a shortage could boost the cost of copper production by almost a third is a wake-up call for all governments interested in encouraging resource development – and that seems to be fewer governments each year. The green hue which is enveloping more governments each year is discouraging all levels of mining. over time, green governments will discover that life without minerals or without a homegrown mining industry is a very unpleasant place to be. Germany, for example, woke up some time last year to find that China was consuming the rare earths needed in every Mercedes and BMW. The response from German industry was to form a consortium which will invest in all forms of mining, both overseas and at home. Good news as the German awakening might be, it is coming at a late stage in the supply/ demand cycle and will almost certainly be insufficient to plug the looming supply hole appearing across most mineral commodities. Tungsten, tin, molybdenum and zinc are travelling the same path as rare earths, with heavy and growing demand from China. over the next few years, as the driving force behind the commodity sector switches from demand pull to supply shortage, another factor will bring a smile to the faces of existing miners. new projects will cost dramatically more to build, take significantly longer to win government approval and be very late to deliver their output to market. Fears that the commodity super-cycle is over because the western world is stuck in a recession, and China’s growth rate is slowing, need to be offset by this emerging crisis of supply shortfalls and project delays.

Too risky on the question of future supply it would be a brave, or foolish, observer to suggest that companies investing heavily in Africa and South America are in for a nasty surprise. Bravery is not one of Dryblower’s finer attributes, so it is with a touch of the foolhardy that he reckons Rio Tinto is in the process of making another of those classic bloopers that have hurt the company badly in the past. A few weeks ago, the big Anglo/ Australian mining house finalised its joint venture with China’s Chalco group to develop the Simandou iron ore mine in one of Africa’s more ghastly countries, Guinea. The Simandou project looks to be easy enough. in terms of risk factors, outside design and construction, there is high probability that once the project is built the government of Guinea – or whatever colonel is in charge at the time – will either nationalise the project, or hold it to ransom at the barrel of an AK47. not since Rio Tinto almost destroyed itself by paying $US40 billion for Canada’s Alcan aluminium business has it made such an horrendous decision as the one to pursue Simandou.

Just silly SiMAnDoU, however, looks sensible alongside the silliest mining proposal since seabed manganese nodules hit the headlines. Asteroid mining, as proposed by a team of rich Americans, comes from the Loonie Tunes handbook, if only for one reason. There is no evidence whatsoever that asteroids are made of anything except basalt, iron ore and perhaps a bit of nickel.

“You don’t make the poor richer by making the rich poorer.” – winston Churchill. 124

JUNE 2012 amm


In mining, the value is right under the surface

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Australia's Mining Monthly June 2012