Thursday 12th December 2019 Font size:

Mining giants compete to expand Australian iron ore exports

Monday, November 11th, 2019

SMM, industry analysts said that with the rise in iron ore prices, Australia’s three major iron ore producers once again increased investment in the Australian iron ore industry, which helps to maintain Australia’s iron ore exports in the world market No. 1 position.

Australia exported 835 million tonnes of iron ore in 2018, with revenues of $64 billion, accounting for 53 per cent of global iron ore exports that year, according to the data.

Australia’s Federal Department of Industrial Innovation Science (DepartmentofIndustry,InnovationandScience) expects Australian iron ore export revenues to rise to about A $75 billion in 2018 due to supply disruptions in the rest of the world, mainly Brazil, and continued high demand from China.

Australian iron ore exports are expected to rise from 806 million tonnes in 2018 to 869 million tonnes in 2020, driven by faster efforts by large producers to meet long-term production targets, industry analysts said.

The ambitions of BHP Billiton

In June 2018, mining giant BHP Billiton (BHP) approved an investment of US $2.9 billion to develop the SouthFlank project in the Pilbara (Pilbara) region of Western Australia to completely replace its 80 million-tonne Yandi iron ore project, which is nearing the end of its “economic life”. The SouthFlank project expands the existing infrastructure in area C, including 800000 tons / year of broken screening equipment, land transport systems, yard and freight train loading facilities, as well as the procurement of new mining transport convoys and extensive mine development and pretreatment.

The SouthFlank project, which is scheduled to go into production in 2021, is expected to sustain iron ore production for more than 25 years.

MikeHenry, president of BHP’s Australian mining business, said at the time: “SouthFlank is a capital-efficient project that provides attractive returns and has been approved after a thorough review of BHP’s capital allocation framework.”

The project is expected to increase the average iron ore grade of BHP Billiton mines in the Pilbara region from 61 per cent to 62 per cent and the overall proportion of iron ore blocks from 25 per cent to about 35 per cent.

In July, the local government in Western Australia approved BHP’s long-term development plan for the Pilbara iron ore business. BHP Billiton’s proposal for an iron ore expansion strategy in the Pilbara region details the company’s plans and potential operations in the Pilbara region, including mining operations, railways, storage areas, dams and related mining infrastructure, these operations will continue over the next 50 to 100 years. The strategic proposal outlines that as many as 11 more iron ore projects could be developed in Pilbara over the next 50-100 years. EdgarBasto, president of BHP Billiton’s iron ore assets in Australia, said the framework would enable BHP and state regulators to focus on the efficiency of long-term planning and the environmental impact of managing areas for the benefit of future generations.

Rio Tinto’s ambitions

(RioTinto), the global mining giant, also plans to invest a lot of money in Australia’s Pilbara. Rio Tinto had already announced a $1.55 billion investment with joint venture Mitsui (NipponSteel) and Nippon Railway Sumitomo Metal (SumitomoMetal) to maintain the sustained production capacity of the two projects that form part of the RobeRiver joint venture.

Rio said the partners would develop the RobeValleyB, C and H deposits, as well as the C and D deposits of the existing WestAngelas mine project, allowing Rio to maintain its production of Pilbara mixed and RobeValley ore fast and powdered ore. Rio Tinto said the first batch of ore from the project was expected to go on the market from 2021.

In October 2018, Rio Tinto also teamed up with iron ore exploration giant HancockProspecting, which owns the RoyHill mine, to build a new iron ore mine in HopeDowns in Pilbara and put it into production. BabyHope Iron Mine, the fourth iron ore jointly developed by Rio Tinto and HancockProspecting, will help maintain the existing capacity of the HopeDowns1 project, which, together with the HopeDowns4, produced 46.9 million tons of iron ore in 2017.

In November 2018, Rio also approved a $2.6 billion investment plan for the Koodaideri mine, which will be Rio’s first “smart mine”, integrating the industry’s latest high-tech achievements and improving its automation and industrial robotics.

This is a large-scale, low-cost, high-grade iron ore project that will produce alternative iron ore products and form a new production center for Rio Tinto in the Pilbara. Depending on market conditions, the project is expected to increase the production of Rio Tinto Pilbara low-gas and high-priced iron ore blends, which is expected to account for 38 per cent of iron ore output from the current 35 per cent. The annual production of the Koodaideri mine will reach about 43 million tons by 2021, but is likely to increase to 70 million tons or more thereafter.

JeanSebastianJacques, Rio’s chief executive, told shareholders, “the Koodaideri mine has changed the rules of Rio’s game. This will be the most technologically advanced iron ore we have built and will set a new benchmark for the industry in the use of automation and the use of data to improve security and productivity. As we pursue a value maximization approach, targeted high-quality investments such as Koodaideri will ensure that we continue to create value for shareholders and Australians. ” “further investment in our iron ore business is also a vote of confidence in billions of dollars in Western Australia.” Construction of the mine is scheduled to begin by the end of the year and is expected to go into production in 2021.

https://news.metal.com/newscontent/100991818/mining-giants-compete-to-expand-australian-iron-ore-exports-are-expected-to-reach-870-million-tons-per-year-within-two-years/
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