Fortescue finishes Pilbara port expansion

Iron ore powerhouse Fortescue Metals Group has boosted its export capacity to 155 million tonnes a year with the completion of its Pilbara port expansion project.

The $2.4 billion development is critical to the company’s growth plans, and is expected to triple FMG’s production capacity across its operations, the ABC reports.

Construction of its fourth berth at Herb Elliot port in Port Hedland is now finished.

In May the company officially opened its Firetail iron ore mine, with the final stage of its Solomon Hub, the Kings mine is due to come online later this year.

The Solomon Hub will produce around 60 million tonnes per annum, with "Firetail producing 20 million tonnes per annum, while the second stage of the development, the Kings Mine, will produce another 40 million tonnes per annum," FMG chief executive Nev Power said.

Small steps for WA rail plan, says Aurizon

Iron ore producer Atlas Iron has welcomed a new railway in Western Australia’s iron ore Pilbara region, calling it a “fantastic solution”.

But builder of the railway Aurizon alerted it will not make any hasty decisions on the project.

Brockman Mining signed a three year agreement with Aurizon that will see it build and operate rail and port infrastructure for the company’s Marillana and Ophthalmia mines.

Aurizon will operate rail, rolling stock and related infrastructure required by the mine projects and build port facilities.

Brockman Mining signed a supply, infrastructure cooperation agreement in the Pilbara with Flinders mines. It said they will work together on a transport solution that will get their product to market.

Brockman Mining and Flinders mines have signed a supply, infrastructure cooperation agreement in the Pilbara, saying they will work together on a transport solution that will get their product to market.

The freight rail operator’s chief executive Lance Hockridge told ABC’s Inside Business Aurizon needs the backing of a couple of mining companies in order to go ahead with the $10 billion rail network.

Atlas Iron managing director Ken Brinsden agreed and said the project would require assistance from many customers to make it financially feasible, The Australian reported.

“We’ve made no secret that Atlas is not really in a position to justify rail in its own rights, so I would say that if a network like Aurizon is going to be able to get up in the Pilbara then there’s no doubt in my mind it needs multiple customers,” Brinsden said.

“It’s fair to say we’ve got a discussion going on with quite a few people and at the end of the day the Aurizon solution might very well constitute it: a fantastic solution for the Pilbara as a whole.”

Hockridge said the company needs to do more work before starting the project.

“The concept is essentially open access. It would be open to all corners, as opposed to being dedicated to individual miners.” he said.

“We come from a mindset that is a 30 to 40-year business. We’re very much in the early stages of our investigation and I don’t think that there’ll be any resolution of that any time soon.

“We’re focused on our concept and I emphasise again it’s at concept phase and we need to do a good deal more work.

“We’re encouraged by the progress so far but there are self-evidently a whole range of issues that we’ve got to get through before we get to anything which is more definitive.”

Atlas Iron pays an average of $13 a tonne to transport iron ore from the Pilbara mines to Port Hedland.

But Brinsden expects the price to dip to as low as 5c to 6c per tonne per kilometre if the rail lines are built like those on east coast coal networks.

“There’s an opportunity to be on the rail, and rest assured we’re working really hard to look for solutions like that so we can come up with a logical and commercial, more sophisticated infrastructure solution that makes sense for the growth of the business,” Brinsden said.

Aurizon said earlier this month it will slash costs by more than $230 million over the next two years, which will see job cuts and property sales. It said it would move to cut $70 million in labour costs over the next 24 months.

It is not known how many jobs will be affected.

The company has cut hundreds of jobs over the past year, with voluntary redundancies comprising most of it.

Qantas take off on 3-year Roy Hill FIFO contract

Qantas has inked a three-year agreement to provide FIFO services to Gina Rinehart’s $9.5 billion Roy Hill iron ore mine.

The contract will see Qantas Airways’ Network Aviation division fly to the site three times a week by mid August using its Fokker F100s.

The value of the deal has not been revealed however The Australian reported the airline expects to expand its services as work at the project ramps up, with a predicted 3600 employers need at the site.

Qantas Domestic chief executive Lyell Strambi said the Roy Hill contract was the latest win for the company and a milestone in the airline's target to develop regional services across Australia.

"The agreement demonstrates Qantas's strength in the fly-in, fly-out business and affirms our strategy of investing and expanding our charter operations through Network Aviation," he said.

Roy Hill's sealed 2.5km Ginbata air strip was certified by the Civil Aviation Safety Authority at the end of May and terminal facilities have also been built.

Roy Hill general manager external affairs Darryl Hockey said Qantas was chosen because of its quality safety record and reliability.

Hockey said the first flights would transport workers involved in preparation works such as earthworks for the processing plant.

 "Then we move into what we call foundation works but we don't actually start construction proper until we've got our debt finance in place," he said.

Hockey said the Qantas deal would ensure the right people were available "at the right place at the right time".

"Once production begins in 2015, safe and dependable air services will be critical to the ongoing efficiency and productivity of the Roy Hill operations," he said.

Last year Qantas announced plans to add another 14 aircraft to its fleet to cater to a growing demand for travel from fly-in-fly-out mine workers.

At the time QantasLink executive manager Narendra Kumar said mining geared aviation was expected to grow 50 to 70 per cent over the next few years.

He said Qantas expected to rake in a “sizeable chunk of the market”.

Image: abc.net.au

Juniors join forces, addressing Pilbara infrastructure issues

Junior miners Brockman Mining and Flinders mines have signed a supply, infrastructure cooperation agreement in the Pilbara, saying they will work together on a transport solution that will get their product to market.

On Wednesday LMH reported Brockman had signed a three year agreement with Aurizon that will see the rail operator develop and operate rail and port infrastructure for the company’s two Pilbara iron ore projects.

Aurizon will operate all rail, rolling stock and related infrastructure required by the mine projects and develop port facilities.

The two deals add to the mounting battle over transport infrastructure in the Pilbara.

Brockman has previously attempted to gain access to Fortescue Metals Group’s railway using third party access laws but according to The West Australian the bid has been bogged down by Western Australia’s regulatory process, forcing the miner to look at alternatives.

But according to WA Premier Colin Barnett the fight over rail access is holding projects up more than government red tape.

Barnett has previously said resource companies fighting over sharing infrastructure is one of the biggest hurdles in keeping projects to time and on budget.

He said the Department of State Development spent more time dealing with disputes between resource companies than it did solving regulatory delays.

BHP Billiton and Rio Tinto’s railways in the region were built before WA introduced third party access laws.

Fortescue is attempting to sell down its stake in its railway, with some expecting Atlas Iron to negotiate a deal to access the infrastructure to accommodate the growth of its projects in the region.

Investors’ calls for Fortescue to reduce its $US10 billion debt are fuelling the company’s move to offload its minority interest in its port and rail assets which are expected to deliver $US3 billion to the company.

The sale, which was expected to be finalised by June 30, has been pushed to the September quarter.

When Brockman asked for access to its Pilbara rail line, the Fortescue owned TPI gave a floor cost of $73.4 million and a ceiling cost of $575.6 million.

Adding to the infrastructure debate in the region is Gina Rinehart’s Roy Hill Holdings, proposing to build its own railway rather than purchase access to someone else’s.

Brockman CEO Russell Tipper said today’s memorandum of understanding with Flinders is a step forward.

"The potential aggregation of tonnages ensures a critical mass that could further enhance the economic viability of any proposed shared infrastructure solutions for junior iron ore miners in the Pilbara," he said.

Flinders executive chairman Robert Kennedy said while the deal is non-binding, its completion will benefit both companies.

"It is Flinders' intention to work with Brockman towards a binding terms sheet that aggregates the Flinders product with the Brockman product," he said in a statement.

Brockman and Aurizon sign Pilbara rail deal

Brockman Mining has signed a three year relationship agreement with Aurizon that will see the rail operator develop and operate rail and port infrastructure for the company’s two Pilbara iron ore projects.

Brockman said the binding agreement meant Aurizon would be the exclusive supplier to develop and operate the infrastructure required for its Marillana and Ophthalmia mines under long term agreements to be negotiated for the life of the mine.

Aurizon will operate all rail, rolling stock and related infrastructure required by the mine projects and develop port facilities.

"The relationship agreement provides that the railway may be a new heavy haul railway to be developed by Aurizon (East Pilbara Independent Railway), a new railway developed by a third party, an existing railway operated by a third party, or a combination of these railways (or parts of these railways)," Brockman said in a statement.

Brockman said the agreement would complement and support ongoing efforts to secure access to FMG's rail and port infrastructure, the North West Infrastructure joint venture with Atlas and FerrAus to facilitate construction of a port and an agreement with Tianjin Port Group concerning port facilities at Port Hedland.

Brockman Australia’s chief executive Russell Tipper said the agreement with Aurizon reinforced the company's focus on securing an economic and operationally feasible infrastructure haulage solution for its mines.

"I see Brockman and Aurizon as a logical partnership motivated to advance an infrastructure solution in the East Pilbara that will benefit all juniors," he said.

Image: perthnow.com.au

BHP fast tracks iron ore modernisation

BHP Billiton is fast tracking the modernisation of its Pilbara iron ore division, coinciding with the launch of its new remote operation centre in Perth.

The move will also attempt to reduce contractor spending, SMH reports.

BHP's iron ore boss, Jimmy Wilson, will open the ''integrated remote operating centre'' with WA Premier Colin Barnett today.

The centre’s launch adds to the growing trend of mine site automisation and remote control initiatives with mining and logistics work in the Pilbara increasingly being controlled in Perth.

Rio Tinto already runs a similar operation out of Perth Airport and Roy Hill Holdings is also developing a remote operation centre for its iron ore mine, port and rail project.

Earlier this year BHP said it will focus on automated equipment and new technology as it moves toward “next generation mining”.

Stop fighting and share infrastructure, Barnett tells mining companies

In what comes as a reproach to iron ore companies fighting over rail access in the Pilbara, Colin Barnett said the warring between resource companies was holding projects up more than government red tape.

Barnett said resource companies fighting over sharing infrastructure is one of the biggest hurdles in keeping projects to time and on budget.

Barnett said the Department of State Development spent more time dealing with disputes between resource companies than it did solving regulatory delays, the West Australian reported.

"People talk in the resources industry about frustrations with government delays and approvals and red tape, and I concede there is still more work to be done," he said.

"But the biggest obstacle to timeliness and keeping costs down is disputes and lack of agreement and a lack of sharing infrastructure in the mining and the petroleum sectors. And the companies need to look at themselves – and (the rail access dispute) is an example."

The rebuke by Barnett comes amid revelations that Fortescue Metals is seeking to charge junior Brockman up to $576 million a year to access part of its Pilbara rail line.

Analysts say the price is well above $17.50 to $20/t figure FMG is charging BC Iron for haulage, which also includes port handling prices at Port Hedland.

The junior iron ore explorer is seeking access to FMG’s rail infrastructure in the Pilbara and wants to haul up to 20 million tonnes of iron ore per year from Marillana to a proposed rail spur near Port Hedland.

But Brockman has requested that the Western Australian Economic Regulation Authority step in to set an access price after private negotiations between the companies failed to result in an agreement.

Barnett said the dispute was a commercial matter, but still "concerning".

"Ultimately, Government could introduce legislation I suppose, but I would just appeal to companies to be sensible," he said.

Image: abc.net.au

Multi-user port in Pilbara receives EPA backing

A multi-user iron ore port in the Pilbara has been given approval by the State’s Environmental Protection Authority.

The port at Cape Preston East, 60km south-west of Dampier, will use a new method to transfer iron ore from shore to ship, removing the need for dredging.

Self-powered barges will move iron ore produced by proponent Iron Ore Holdings to a large transhipment vessel moored about 18km offshore, The West Australian reported.

The EPA imposed eight recommended conditions.

The proposal will now be handed to WA Environment Minister Albert Jacob.

The EPA also recommended for conditional approval a new commercial algae farm near Karratha, proposed by Aurora Algae Pty Ltd.

Image: perthnow.com

Rio wins long running iron ore rail battle

 Fortescue have lost their battle to access Rio Tinto’s iron rail network in the Pilbara.

The Australian iron ore miner had been fighting for access to Rio's Hammersly and Robe River lines.

However the Australian Competition Tribunal’s have ruled that Rio’s Hamersley and Robe rail lines should not be opened up to other users.

In 2010 the long running battle came to a head when the Australian Competition Tribunal rejected Fortescue's push for access to Rio’s rail networks, and allowed the major to retain full access to their own Pilbara rail lines  finding that access to Rio’s Hammersley line “would be contrary to the public interest.”

Fortecue continued in its fight to gain full access to the Pilbara network, and was granted a High Court appeal late in 201.

The Tribunal have yet to release any documentation surrounding their latest ruling, however, Rio Tinto Iron Ore acting chief executive Paul Shannon welcomed the decision.

“This is great news. Rio Tinto runs a highly efficient railway that is fully integrated with our port and mine operations. This would be severely hindered if third parties were allowed to run trains on our rail network, not to mention the knock-on negative effect on the Western Australian and national economies from creating such inefficiencies.”

BHP preparing for Port Hedland outer harbour

BHP Billiton hopes to begin pre-construction piling at Port Hedland this Friday, the first step in its $10 billion outer harbour project.

The two-month operation will install three test piles along the route of the proposed outer harbour jetty.

Five other steel piles will be installed to support survey equipment, with the entire project working between 1.7km and 31.5km off the Port Hedland coast.

Earlier this year the company approved close to $1 billion in pre-commitment funding for the Outer Harbour and revised plans for a fly-in fly-out camp to house construction workers.

The company initially proposed a 6,000-person camp but after its rejection the number was revised to 2,000 with the option to add a further 2,000.

BHP’s board is expected to give total approval to the Outer Harbour Development later this year.

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