Kerman win Sino iron ore contract

Kerman Contracting has won a $146 million contract for works at Sino Iron’s Cape Preston operation.

The contract will provide structural, mechanical, piping, electrical, and commissioning works, with construction to begin this month.

Scope of the works include the AG mill, pebble crushers, and stockpile tunnel areas for processing lines 3 to 6 at the Sino Iron project.

“By installing 15 000 tonnes of structural steel, 800 pieces of mechanical equipment, 40 km of pipe, and 80 km of cable, Kerman will contribute significantly to complete the remaining four processing lines at Sino Iron,” Kerman project director Klaus Hartmann said.

Kerman is already working on site at Sino, delivering a $54 million project which includes civil and concrete works for processing lines 3 to 6. 

It also just completed the $13 million installation works at the AG mill ring motor for line two, ahead of schedule.

Port jobs in the firing line as BHP review continues

An ongoing review at BHP Billiton’s iron ore operations could see thousands of jobs lost in Western Australia.

There are reports that BHP is looking to cut around 20 per cent of its WA workforce or close to 3000 jobs as it looks to improve costs at its iron ore business.

Any job cuts would come on top of the hundreds recently stripped out of the miner’s metal operations.

More than 100 workers were cut from the company’s iron ore headquarters in Perth last month, while 170 workers were chopped from Mt Whaleback mine in the Pilbara.

 The West Australian reports BHP’s Port Hedland port operations could see 100 job losses in the coming weeks.

While the company’s contractor workforce is also said to be in the firing line.

BHP is said to be acting on recommendations made in a report by management consulting firm McKinsey and Company.

A BHP spokeswoman confirmed the company had engaged external consultants, but refused to be drawn on exact numbers associated with any cost-cutting measures.

“BHP Billiton Iron Ore regularly undertakes improvement initiatives and organisational reviews as part of an ongoing focus on productivity and cost reduction,” she said.

The review is said to be aimed at ensuring BHP’s iron ore arm remains “a competitive, world-class operation.”

“We have been open with our employees about the work being done to improve productivity, and the review, and we hold regular all employee Town Hall meetings and question and answer sessions with the business leaders as a matter of course.”

As the mining phase moves from investment-led construction to a production focus, BHP has placed a renewed and aggressive emphasis on productivity and efficiency gains across its entire portfolio in an effort to simplify mining operations.

BHP said a productivity focus is “not new”.

FMG signs contract to build new iron ore ships

Fortescue has signed a contract to construct four new ‘very large ore carriers’ (VLOC).

The contract, with an unnamed Chinese shipyard for the vessels, is valued at approximately US$ 275 million and will see the four ships delivered from November 2016 through to May 2017.

The majority of payments will be made upon delivery and funded from existing cashflows.

The 260 000 dwt (dead weight tonnage) class vessels, which will account four around six per cent of Fortescue’s shipping requirements by themselves, are larger than traditional capesize vessels and more suited to Port Hedland’s tidal conditions, according to the miner.

Fortescue CEO Nev Power said this new contract represents a strategic decision to secure long term, low cost freight on vessels that more closely complement infrastructure at the Herb Elliot port.

“These vessels are a natural extension of our supply chain and will play a significant role in increasing efficiencies at the Port and lowering costs,” Power said.

“They also reflect and strengthen our close relationship with China, our largest customer.”

The miner played a major part in the development of the VLOC to ensure the design complemented Port Hedland’s tidal conditions and its shallow nature.

This latest development comes on the back of record outputs at Port Hedland. 

Earlier this month the port saw more than one million tonnes of iron ore leave the site during a single site.

The new benchmark of 1 270 721 tonnes was achieved with seven capesize vessels departing at once.

This beat the previous record set in April by almost 160 000 tonnes.

Port Hedland Port Authority also said it was the first time seven capesize vessels have sailed on a single tide.

Record iron ore export out of Port Hedland

Two million tonnes of iron ore was exported out of Port Hedland for the first time overnight.

The milestone was achieved on the morning and evening tide on 28 April 2014, resulting in a total of 2,028,105 tonnes exported.

As a result, the port managed 24 vessel movements in the 24 hour period.

It is understood iron ore production capacity expansions from the port's major users, BHP Billiton, and in particular, Fortescue Metals Group is behind the increased export volumes.

 The month of April also saw a new record achieved for the largest amount of product exported on a single tide, with 1,111,109 tonnes on 6 April 2014.

However it’s not all good news for Australia’s best-known commodity.

Iron ore prices took another slide overnight, down 2.3 per cent to US$108.60.

As a result, iron ore miner shares were down in early trade with BC Iron losing 3.3 per cent, FMG down 2.5 per cent and Mount Gibson Iron Limited also down 2.5 per cent.

As always, the major diversified players were more sheltered with Rio Tinto down 1.1 per cent and BHP 0.7 per cent.

The skittish reaction to the iron ore spot price fall comes amid mounting speculation a flood of oversupply will come online, coupled with credit worries out of China.

Reuters reports China’s banking regulator has urged local authorities and banks to step up investigations into iron ore financing deals in a bid to minimise default risks.

This raised fears that commodities-backed financing will halt and cause an oversupply as ore is sold from ever-growing stockpiles.

Rail workers for Roy Hill mine to be supplied by Engenco

Engenco has won a $4 million contract with Gina Rinehart’s Roy Hill iron ore mine that will see it provide rail workers to build the project’s new 330km rail line.

The company announced it will supply the workers for Leighton subsidiary John Holland and signed the contract with the firm leading the contracting work at the Roy Hill site, Samsung C&T.

It says work will begin in May with the contract expected to last 18 months.

This is the third contract Engenco has won at the Roy Hill project.

 Its specialist training business, Centre for Excellence in Rail Training (CERT) has been awarded two contracts as a preferred supplier of rail training to both Samsung C & T and John Holland at Roy Hill.

These 18-month contracts, totalling approximately $750,000, were signed in October 2013 and January 2014.

Engenco said work for those contracts would centre around providing the development of a construction rule book, rule book training to Roy Hill, John Holland and Samsung C&T employees, and the development and rollout of railroad verification of competency tools.

Engenco managing director Ross Dunning said the latest signing was a significant win for the company.

"Our Momentum business has been able to capitalise on our existing relationships at the Roy Hill project and provide a tailored solution to meet John Holland's needs," Dunning said.

"This contract provides us with significant opportunities to increase our services to John Holland Group and Roy Hill, and we look forward to helping to develop this large iron ore project."

Brookfield states on Roy Hill’s non-processing infrastructure

Brookfield Multiplex has started work on the Roy Hill iron ore mine’s non-processing infrastructure.

The work is valued at around $73 million.

It follows the contractor finishing its work on the $200 million accommodation village late last year.

According to Brookfield this new contract includes the design and construction of both a heavy and light vehicle workshop, washdown facilities, tyre change areas, and a lube farm.

It also includes services such as power wash and waste water treatment infrastructure and distribution, as well as administration buildings.

Brookfield’s subsidiary Engineering and Infrastructure (E+I) will undertake the work over three states, with all buildings and facilities due to be completed early next year.

The NPI will be located ten kilometres from the mine’s process plant, and close to its 2000 dwelling village.

It will be able to service a fleet of up to 142 pieces of equipment vehicles, and house around 250 staff.

Chris Palandri, Brookfield’s WA managing director, described the NPI area as the “engine room” of the mine.

“The NPI is a critical component of the Roy Hill project. Because the mine is situated in such a remote region – about 100km from the nearest town – it’s imperative that provisions for the maintenance of vehicles and the administration and care of staff is readily available on site,” Palandri said.

“The fleet service and repair facilities will ensure efficient transport of product and personnel across the mine, while the administration buildings will include training rooms, medical services and storage, to assist staff to safely complete their work.

“This is the second E+I contract for the Roy Hill project for Brookfield Multiplex, following the completion late last year of the mine accommodation village. We aim to exceed expectations and to ensure that the NPI facility will mirror the success of that project, which was delivered on time, on budget and of excellent standard.

Komatsu increases service foothold in Pilbara

A new, state-of-the-art, Komatsu service and rebuild centre is under construction in the Pilbara, with the ground breaking ceremony taking place late last month.

The new facility is scheduled to open up late this year.

The new 1300 square metre facility will replace the current Port Hedland branch, and will become Komatsu’s West Pilbara rebuild centre and parts warehouse.

The new centre has been designed to handle rebuilds of ultra-class mining equipment, including up to 290 tonne capacity 930E electric drive dump trucks and WA1200 wheel loaders.

The new service branch will include two high bay workshops, washbay, 7000 square metre yard, 25 tonne gantry crane, parts warehouse, and a customer support office.

Komatsu’s Pilbara operations are a significant part of the company’s global operations, with more than 900 Komatsu machines operating in the Pilbara.

Rio Tinto will also be deploying the first major fleet of Komatsu’s breakthrough Autonomous Haulage System of driverless trucks.

Komatsu Australia managing director Sean Taylor said the Pilbara, a world class mining precinct, represents a significant portion of Komatsu Australia’s business.

“It’s home to our autonomous haulage fleet, and has one of the largest population of electric drive mining dump trucks anywhere in the world,” he said.

“It makes sense that we continue to invest in our capacity and capability in the Pilbara, to ensure we continue to provide the support our customers are asking for.

“Our investment goes beyond just bricks and mortar – we are also investing heavily in technical training so that our customers are assured that they are dealing with the experts when it comes to maintaining their machines.”

This latest ground-breaking ceremony is one element of Komatsu’s largest ever expansion in Australia, a program which started with the opening of its flagship facility in Wacol, Brisbane in 2012.

Clough JV wins Fortescue iron ore port contract

The BAM Clough joint venture has won the contract to design and build Fortescue fifth loading berth at Port Hedland.

According to the company the work at the Anderson Point Facility includes a 306 metre long wharf extension, seven berthing dolphins, and the supply and installation of the wharf conveyor modules.

Fortescue announced plans to build its fifth berth in 2012.

Clough says project engineering has already begun, with procurement and planning work scheduled for this month.

Construction is slated to begin in May, with completion expected early next year.

Kevin Gallagher, Clough’s CEO, said this contract is a major milestone for the JV.

“As the recognised market leader in near shore marine project delivery for the Australian oil and gas sector, this is a great opportunity for  BAM Clough to participate in Fortescue’s growth journey for the first time and bring our full suite of design and construction services to the Australian mining and minerals sector,” Gallagher said.

“We will draw on BAM Clough’s extensive local and international resources and 50-year track record in local project delivery to ensure this important project is safely delivered to Fortescue’s cost, schedule and quality requirements.”

The award comes as the BAM Clough joint venture celebrates its 50th year.

McAleese Resources wins Atlas Iron haulage contract

McAleese has won a fifth iron ore haulage contract with Atlas Iron at its Mt Webber operations.

The four year contract, valued at approximaetly $250 million, involves the loading and hauling of around three million tonnes of iron ore annually.

The contract will start mid next year, with ore shipments expected to commence from the June quarter of 2014.

Paul Garaty, McAleese’s CEO, said “Mt Webber will be a significant addition to Atlas Iron’s ore exports and we look forward to working with Atlas to continue safely and efficiently deliver iron ore to port from their fifth mine commissioned in five years”.

“The flexibility and lower capital requirements of road haulage has delivered an effective transport solution for Atlas and supported their rapid growth,” he said.

“With Atlas’ complement of smaller scale, close to port mines, having the flexibility to dynamically schedule the road transport fleet to meet production, shipping, and grade quality targets is paramount.

“We are delighted that we continue to be Atlas’ preferred road transport provider.”

Mt Webber is located 230 kilometres away from Port Hedland’s Utah Point port facility, and will now see, after the signing of this contract, an additional 22 McAleese road trains hauling an extra 500 000 kilometres per month.

This takes it total haulage distance with Atlas to around three million kilometres per month.

FMG breaks iron ore shipment record

Iron ore miner Fortescue Metals Group has set a new record, loading the biggest ever single shipment of iron ore.

Leaving Port Hedland on Thursday, the Liberian registered ship Hugo N was loaded with 263, 962 tonnes of iron ore, The Australian reported.

Bound for China, the cargo is estimated to be worth about $35 million.

Set in November, the previous record for largest iron ore shipment was 263,023 tonnes of product.

Last month about 28 million tonnes of iron ore was shipped from Port Hedland,

For the 2012-13 financial year about 280 million tonnes of iron ore was exported through the port, with BHP Billiton and FMG making up the bulk of the shipments.

FMG chief executive Nev Power last week told reporters that capacity constraints at the port are a “myth” perpetuated by junior miners.

Previous modelling indicates the port can export about 495 million tonnes a year but Power said with improved efficiencies output could be lifted to around 650 million tonnes.

“The reality is the Pilbara is not constrained by Port Hedland,” Power said.

“I know we’ve heard all that, the squawking and so on from lots of people that say it’s the lack of port capacity that’s stopping development. But Utah Point is probably running at 50 per cent utilisation, the port overall is running way under that, and there’s lots and lots of opportunity.”

In August the miner completed its $2.4 billion Pilbara port expansion project, which is part of its infrastructure plan to boost export capacity to 155 million tonnes a year.

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