The opportunity to view $1 billion in infrastructure investment and hear first hand how Rio Tinto Iron Ore goes about managing the component projects, provided the 100 participants on the 2005 Outback Forum with a refreshed view and appreciation of the scale and pace of growth of iron ore mining in the Pilbara.
Stepping onto the Karratha tarmac to an engulfing 280C, the participants were confronted by a day brimming with activity. The annual Outback Forum is all about experiences. This year the Forum included visits to Rio Tinto’s Dampier Port expansion project and Railway Control Centre, viewing of some of the Burrup Peninsula’s world-renowned ancient Aboriginal rock carvings, and a tour of Mermaid Marine’s operations, along with briefings that enlightened the group on government and community issues in one of the world’s most remote mining locations. All of this, yet still time to enjoy a tantalising seafood luncheon.
In a recent address to the WA Division of AICD, Mr Leigh Clifford, CEO of Rio Tinto stated;
“The iron ore industry now is confronted by the further challenge of China’s rapid rise to become the world’s largest steel producer and the world’s largest market for iron ore. This rise has been so rapid that it’s caught every iron ore exporter by surprise”.
This may be so, yet visiting the Burrup Peninsula, it is apparent that Rio Tinto Iron Ore is getting on with the job of responding to this surprise, and in a significant way.
The Group’s Expansion Projects division is working across all of Pilbara Iron’s operations to lift production capability. Expanding the capacity of RTIO’s Dampier Port facilities from 76 to 116 million tonnes per annum involves new facilities, stockyards, wharf ship loaders and a tug boat harbour, while running the operations at record rates. The new port capacity will be matched inland by increased output from mine locations including Yandi 36, West Angelas, Tom Price, Marandoo and Nammuldi. Add to this a 100km duplication of the main rail line, additional power generation from two new gas turbines at Paraburdoo and constructing new housing, accommodation and town infrastructure, and you have some sense of the scope and complexity of ramping up an already enormous operation.
The market’s insatiable demand for iron ore creates the opportunity for expansion and building sales, but the day’s experiences showed that this has not automatically translated into easy street for the miners. Participants heard how meeting the now well-documented skills shortage is a critical element, as is the challenge of increases in the cost of materials and scarce resource availability. The demand for quality housing also places the median price of local housing well above that of the State average.
The group also learnt that achieving this growth is not all about putting physical infrastructure in place. Equally apparent was the importance to track the 50 separate projects that require between three and eight external approval elements over an 18-24 month period. Bill Hart General Manager - Government Relations and Approvals for Rio Tinto Iron Ore commented that;
“Managing the critical elements of the cumulative 250 approval tasks has a direct correlation to the outputs at the mine, ports and ultimately the returns to shareholders, government and the communities.”
The Forum was also interested to hear how times have changed – in sharp contrast the time taken to design, approve and build the Mount Tom Price mine, rail, the Dampier Port and towns of Dampier and Tom Price in the 1960s was just 18 months.
Mermaid Marine, a major supplier to oil and gas industry, surprised participants with a short trip on their newest barge to view a tug boat water display and the expansion projects from the water ending the 2005 Outback Forum on a high.
The support provided from KPMG in their eighth consecutive year of sponsoring the Outback Forum, and by Mermaid Marine as co-sponsor, ensured the successful outcome of this year’s event.
With the recent announcement of a further combined investment of over $3 billion by Rio Tinto Iron Ore and BHP Billiton to expand their iron ore operations in the Pilbara offers further exciting opportunities for the mining sector and Western Australia, as well as future Outback Forum experiences.
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