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”.

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.

Padbury’s Oakajee plan ‘unrealistic’: WA Premier

West Australian Premier Colin Barnett said there is “very little prospect” Padbury Mining’s $6 billion plan to develop the Oakajee rail and port project would gain his government’s backing.

In what comes as a blow to the seemingly shaky deal, Barnett told reporters “there is little substance behind Padbury.”

He said he had not meet with representatives of the junior mining company and did not intend to, The Australian reports.

The strongly worded comments come as Padbury is today preparing to announce to the market the funding arrangements for the deal.

Yesterday, Padbury revealed Sydney businessman Ronald Breyer was tied to the two companies involved the development, Superkite and Alliance Super Holdings.

Bleyer this week told the media he was ''chairman of the finance committee” for the companies.

Asked if he would support a ­realistic proposal put forward by Padbury, Barnett said:

“I don’t believe it’s realistic — simple as that.”

Padbury Mining first announced it had backing for the Oakajee project on April 11.

ABC reports the Australian Securities and Investments Commission is looking into Padbury's disclosure and share trading in relation to the deal.

Bleyer has been involved in a number of failed business ventures of late.

Last month the NSW Supreme Court ordered Superkite and Alliance Super Holdings repay money to aged care company Craigcare after a $500 million funding deal failed.

While last year, a $260 million deal with junior mining company Fairstar Resources also fell through.

Padbury is expected to announce the funding deal rests on the support of a Korean construction company fronting up 20 per cent of the project costs.

The company’s shares remain suspended.

$6 billion Oakajee port and rail deal funding partner revealed

Padbury Mining has again failed to reveal the identity of its $6 billion funding partner for the Oakajee port and rail project, but Sydney business man Roland Bleyer has claimed responsibility for the deal.

Following days of speculation as to who the mystery backer was, Bleyer reportedly revealed limited details to the Sydney Morning Herald.

The paper reports Bleyer said a number of private companies including Superkite and Alliance Super Holdings were working on a deal to fund the project.

Bleyer said he was a ''chairman of the finance committee'' for the companies.

The revelation comes as Padbury Mining, which first announced it had backing for the project on April 11, again failed to reveal details of the funding partners’ identity as ordered by the ASX.

Padbury first said it would update the market last Tuesday, but then extended the trading halt to Thursday stating it was seeking information from the backers of the deal “in respect of their capacity to meet their funding obligations.”

It also said it was seeking consent to disclose the agreement in its entirety with the announcement.

However the company had sought an extension again, this time promising to make an announcement tomorrow.

The delay has fuelled industry chatter that the deal won’t go ahead amid concerns over its viability.

Managing director Gary Stokes said the announcement was legitimate.

Stokes said the project would open up the Midwest region to the 21 companies operating in it.

The original announcement said funding for the project will come in three tranches with the first delivering $US470 million ($501.2 million) to complete design and construction plans.

Bleyer said further details would be made available shortly after lawyers for Superkite and Alliance Super Holdings had given the go ahead for Padbury to release a copy of the ''counter-signed shareholders agreement''.

Bleyer has been involved in a number of failed business ventures of late.

Last month the NSW Supreme Court ordered Superkite and Alliance Super Holdings repay money to aged care company Craigcare after a $500 million funding deal failed.

While last year, a $260 million deal with junior mining company Fairstar Resources also fell through.

An online blog claims Bleyer started his career in New Zealand as a hair and skin treatment specialist while also developing interests in fashion and manufacturing.

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."

Perth truck drivers back-paid $93,000

Twelve truck drivers at a Perth transport business have been back-paid a total of $93,000 following recent ruling by the Fair Work Ombudsman.

The workers were underpaid the cents-per-kilometre rates they were entitled to for long-distance trips over a 12-month period in 2011-2012 because their employer did not apply the correct minimum rates when calculating their pay.

Fair Work Ombudsman Natalie James says the case highlights the importance of employers being fully aware of the correct pay rates their workers are entitled to.

“If left unchecked over time, a small underpayment can result in a hefty bill when discovered – a bill that most small business have not budgeted for,” James said.

CITIC’s Sino Iron project ships first concentrate to China

After four years of delays and billions of dollars of budget blowouts CITIC Pacific has celebrated its first shipment of magnetite concentrate from its Sino Iron project in the Pilbara.

Yesterday West Australian Premier Colin Barnett launched the first shipment with CITIC's chairman Chang Zhenming stating the completion of the project was a boon for the state’s magnetite iron ore sector.

The shipment of concentrate will be loaded onto barges at Cape Preston and transported to a larger vessel 10km off the coast before being shipped to China.

Barnett said the Sino Iron project represented the investment opportunities available in the state which has significant magnetite reserves, the West Australian reported.

"The Sino Iron project is the first magnetite mine to reach production in the Pilbara and today's launch marks the first shipment through the newly completed Cape Preston port," Barnett said.

"This is the biggest magnetite mining and processing operation under construction in Australia and is a further sign of the potential of the industry to stimulate new investment and construction activity throughout the State."

Citic Pacific's huge $10 billion Sino Iron project is set to be the largest magnetite development in the world, producing around 28 million tonnes of concentrate and pellets a year.

The project, expected to have a 30 year life, includes a mine, desalination plant, concentrator, power plant, and port.

During the height of construction more than 4000 people worked on the project, while 1000 people will be required during full operation.

The commissioning of the first of the project's two production lines started in July, with the company hoping to ramp up to full production over the next six months.

The first shipment signals the first time a Chinese-owned mining company has transported iron ore products from WA to China.

The project ran into a spate of delays and cost blow-outs during the commissioning phase, and late last year CITIC blamed the skills shortage, bad weather, and the inexperience of its lead contractor for delays on the project.

Legal disputes with billionaire Clive Palmer over royalty payments have also hampered the development and driven up costs.

Port Hedland breaks iron ore export records, again

Port Hedland has posted another record month of iron exports to China, with 25.2 million tonnes of the steel making ingredient that sailed away easily beating the previous record highs of 23 million tonnes set in both May and June this year.

Shipments to China rose by 10 per cent as miners move to optimise efficiencies and increase production to take advantage of a stable iron ore price.

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.

October's result comes on the back a productive year for one of the world’s largest iron ore terminals, with record levels set in April, May and June.

The port’s general manager said exports are not showing any signs of slowing down.

"We're expecting further targets, uptrends for the next year and we're forecasting about 320 million tonnes of port throughput for the 2013/ 2014 financial year,” John Finch said.

"We're still fielding a lot of enquiry for demand. Not only have we got the large iron ore players BHP and FMG in the port at the moment, but we've got Hancock Prospecting and the North-West Infrastructure Group planning their new developments for the next few years ahead as well,” Finch said.

The continuing price strength of iron ore comes as the slowing demand from China usually seen at this time of the year has failed to come into play.

"China has been restocking after record levels of iron ore imports over the past few months," Deutsche Bank strategist Xiao Fu said.

"We expect the pace of restocking could slow. However, we are still below the 2011-12 (inventory) peaks, which suggests that the restocking cycle could last for another two or three months.                                                                

Komatsu Perth branch re-locating

Komatsu Forklift Australia Perth are moving to a new premises which it says will provide the company with greater safety and service capabilities.

The new site is just 15 minutes away from the current Kewdale location where Komatsu has set up shop for the last 15 years.

Glen Young, branch services manager, says the new facility at Maddington will provide his team with a fresher site.

“The new location in Maddington is significantly newer, providing us with modern building, with a fresh office environment.  Our service department is centrally located in the heart of the building perfect for Service Manager Clarrie Flintoff to keep his every watchful eye on the service business,” Young said.

“The relocation will enable the full implementation of the Komatsu 5S safety program – proving our employees a safe and organised environment from move in date.”

WA Transport Minister calls for comment on PortLink Project

Transport Minister Troy Buswell has asked the people in Kalgoorlie-Boulder to have their say on the PortLink project.

The PortLink concept ultimately links Port Hedland, Kalgoorlie-Boulder, Esperance and Geraldton and Buswell said it has the potential to build a stronger and more flexible transport network.

The project will include a heavy vehicle bypass road, a freight rail bypass around the town centre and a potential intermodal terminal in Kalgoorlie.

One of the main aims of the project is to provide a regional alternative to Perth as a distribution point for interstate general freight.

The government says the new and upgraded road and rail infrastructure proposed as part of the PortLink project also has the potential to link the ports of Fremantle, Esperance, Port Hedland, Geraldton and the future port of Oakajee with the rich mineral resource areas of the WA’s hinterland.

The development of an intermodal freight logistics hub in Kalgoorlie will provide better connection to the eastern states.

With public comment on the project closing on November 1, Buswell said Kalgoorlie-Boulder should attend an information day this Saturday on the planning options for t PortLink.

“These projects have the potential to significantly reduce the number of heavy freight vehicles on local roads as well as reduce rail traffic through Kalgoorlie’s city centre,” Buswell said.

“This will result in improved road and rail safety and provide better amenity for the Kalgoorlie-Boulder community.

“There are three options for each of the road, rail and intermodal terminal and I encourage locals to have a say in what would work best for their community.”

The Department of Transport will host the information session on Saturday, October 19 at Markets Arcade, Hannan Street, Kalgoorlie, between 10am and 3pm.

Regional Development Minister Brendon Grylls said PortLink could open up Western Australia’s resource regions to economic development opportunities.

“One of the objectives of the PortLink project is to test the feasibility of a regional alternative to Perth as a major distribution point for interstate freight,” Grylls said.

Planning studies for Phase 1 of PortLink are being funded by the State Government’s Royalties for Regions program ($5million) and the Commonwealth Nation Building Program ($2million).

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