Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
Issue link: https://emj.epubxp.com/i/239773
REGIONAL NEWS - AUSTRALIA/OCEANIA Rio Tinto to Focus on Brownfield Iron Ore Expansion ery shutdown. Establishing a long-term plan for the bauxite operation and its employees will be the key to Rio Tinto maintaining a sustainable business in the area. "The suspension process will take some time," the Rio Tinto announcement said. "Rio Tinto will be consulting with employees and the community in coming weeks to develop detailed plans regarding the timing and phases for ramping down the refinery. There will be no immediate change to refinery operations. At this early stage, it is expected the process of suspending production would start in the first quarter of 2014 and be phased during the remainder of the year." The Gove mine produced 5.758 million mt of bauxite and the alumina refinery produced 1.597 million mt of alumina during the first three quarters of 2013. Rio Tinto has approved $400 million for plant equipment and modification and for additional heavy machinery in support of its strategy to focus on expanding iron ore production by increasing output from existing mines. On November 28, Rio Tinto revealed a "breakthrough pathway" that will allow it to rapidly expand its iron ore production in the Pilbara region of Western Australia at significantly lower capital costs than previously anticipated. A day later, on November 29, the company announced that it will suspend production at its loss-making Gove alumina refinery in Australia's Northern Territory but that it will continue production at the Gove bauxite mining operation. Iron Ore Expansion: Rio Tinto has developed plans for near-term expansion of its Western Australia iron ore production based on series of low-cost, brownfield expansions of existing mines. From a base run rate of 290 million mt/y at the end of the first half of 2014, the company expects these expansions to lift its production to 330 million mt/y in 2015 and to more than 350 million mt/y by 2017. The added iron ore production will come from multiple mines, including Brockman 2, Brockman 4, Yandicoogina, Paraburdoo and West Angelas. In support of the brownfield expansions, Rio Tinto has approved $400 million in capital expenditure for plant equipment and modification and for additional heavy machinery. The additional production will be achieved at all-in capital inten14 E&MJ; • JANUARY 2014 sity of $120 to $130/mt, including the cost of infrastructure. Rio Tinto Chief Executive Sam Walsh said, "The breakthrough pathway we have identified, combining brownfield expansions and unleashing low-cost productivity gains, means we will deliver the expansion at an estimated capital cost of more than $3 billion below previous expectations." Rio Tinto is deferring an investment decision on the proposed Silvergrass mine until the third quarter 2014 at the earliest, and on the proposed Koodaideri mine until 2016 at the earliest. Gove Refinery Suspension: In announcing its planned suspension of production at the Gove alumina refinery, Rio Tinto stated that the refinery is no longer a viable business in the current market environment. Continuing low alumina prices, a high Australian dollar exchange rate, and substantial after-tax losses despite considerable efforts to improve refinery performance all contributed to the decision. Consultation with employees and the local community will be the priority as the company works with the Northern Territory and Australian federal governments, traditional owners and all other stakeholders to minimize the economic impact of the refin- Sino Ships Concentrate CITIC Pacific shipped the first magnetite concentrate from its Sino iron project in Western Australia in early December. The first of six concentrator lines at the project was fully operational, commissioning was in progress on a second line, and construction was ongoing for the remaining four lines. The Sino iron project is designed to produce 24 million mt/y of magnetite concentrate and will ship its concentrate product to CITIC Pacific steel mills and to other steel producers in China. The project is located 100 km southwest of Karratha, Western Australia. The concentrate is shipped from the Port of Cape Preston, which was built to serve the project. At a ceremony to mark the occasion of the Sino project's first shipment, CITIC Pacific President Zhang Jijing said, "The knowledge and experience gained from the first two concentrator lines will benefit in the installation of the remaining four lines. Production cost per tonne will be high until the project is in full production, as interest can no longer be capitalized and depreciation begins. "We are working hard to bring the additional four lines into operation as early as possible. The economies of scale and the increased production from the additional lines are very significant." www.e-mj.com