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/325596
22 E&MJ; • JUNE 2014 www.e-mj.com Rio Tinto Hits 290M Tons of Iron Ore on Way to 360M Target REGIONAL NEWS - AUSTRALIA/OCEANIA Rio Tinto announced in mid-May that its Pilbara iron-ore mines, rail system, and ports in Western Australia had reached a targeted expansion run rate of 290 million metric tons per year (mt/y), two months ahead of schedule. In October 2010, start- ing from its then operating capacity of 220 million mt/y, Rio Tinto announced a planned expansion to 283 million mt/y. In 2012, the expansion target was increased to 290 mil- lion mt/y, followed by another hike to 360 million mt/y, with 60 million mt/y of capac- ity to be added between 2014 and 2017. Production during 2015 is targeted at 330 million mt. Infrastructure to support the 360-million-mt/y expansion will be com- pleted by the end of the first half of 2015. Commenting on reaching the 290-mil- lion-mt/y production rate, Rio Tinto Iron Ore Chief Executive Andrew Harding said, "We are now focused on the next phase of our expansion toward 360 million mt/y. The infrastructure is on schedule for completion in a little more than 12 months, and, from a base run rate of 290 million mt/y, we have a rapid, low-cost pathway to increase mine production capacity by more than 60 mil- lion mt/y between now and 2017." Rio Tinto's announcement noted that there is likely to be some run rate variabil- ity in coming months as it realizes the inte- gration of AutoHaul, the world's first auto- mated heavy-haul rail system, into its Pilbara rail network. Rio Tinto's Pilbara operations produced 63.4 million mt of iron ore during the first quarter of 2014, 10% higher than during the first quarter of 2013. However, first- quarter 2014 production was below fourth- quarter 2013 levels due to disruption caused by seasonal weather patterns. Severe tropical cyclone Christine closed Rio Tinto's Pilbara ports and coastal rail operations in late December. Heavy rainfall associated with this cyclone and other adverse weather conditions in January and February impacted the company's mine, rail and port operations. Northern Star Adds Jundee to its Growing Mine Portfolio Northern Star Resources and Newmont Mining have entered into a binding agree- ment whereby Northern Star will buy Newmont's Jundee underground gold mine in Western Australia for total proceeds of about $91 million, comprised of cash at closing of approximately $77 million plus a further payment of approximately $14 mil- lion for working capital. Closing is expect- ed to occur by early July. The agreement, announced on May 13, represented Northern Star's fourth pur- chase of a gold mine in Western Australia in a period of less than five months. In December 2013, the company purchased the Plutonic mine from Barrick Gold for A$25 million, and in January 2014, it pur- chased Barrick's 51% interest in the East Kundana joint venture (EKJV) and its Kanowna Belle gold mine for A$75 million ( E&MJ; , February 2014, p. 18). Prior to the acquisitions, Northern Star was a one-mine company, owning and operating the Paulsens underground gold mine in Western Australia and producing about 100,000 oz/y of gold. Following the Jundee acquisition, its production will rise to more than 550,000 oz/y of gold. Jundee will become the largest mine in Northern Star's portfolio. The mine produced 279,000 oz of gold in 2013 and is expect- ed to produce more than 200,000 oz/y over the next two years. Jundee's all-in sustaining cost in 2013 was about A$930/oz. At year-end 2013, Jundee had reserves of 411,000 oz at 4.3 g/mt gold and resources, including reserves, of 507,000 oz at 4.4 g/mt gold. Northern Star sees outstanding potential for growing these resources through in-mine and near-mine exploration. Jundee is located 520 km north of Kalgoorlie. New Agreement Could Launch Restart of Seafloor Mining Nautilus Minerals announced on April 24 the signing of a new agreement with the state of Papua New Guinea that is expect- ed to allow renewed development of Nautilus' Solwara 1 seafloor mining project in the Bismarck Sea, New Ireland province, Papua New Guinea. The project had been stalled due to a dispute between Nautilus and the state regarding the state's financial participation in the project. Under the new agreement, the state will take an initial 15% interest in Solwara 1 and has the option to take up to a further 15% interest within 12 months of the agree- ment becoming unconditional. The state paid Nautilus a non-refundable deposit for its initial 15% interest of $7 million. Subsequently, Nautilus announced on May 9 that Eda Kopa (Solwara) Ltd., the state's nominee for participation in Solwara 1, had placed $113 million into escrow, representing the balance of the funding for Eda Copa's 15% share of the capital re- quired to complete the development phase of the project up to first production. These funds will be released to Nautilus if within six months of the funds being placed in escrow, Nautilus secures the charter of a production support vessel and secures for the state certain intellectual property rights. After first production, Eda Kopa will contribute funds in proportion to its interest. After reaching its targeted interim run rate of 290 million mt/y of iron ore from its Pilbara operations two months ahead of schedule, Rio Tinto predicts that it will encounter some 'variability' in run rate in the near future as it incorporates its AutoHaul autonomous rail haulage system. EMJ_pg04-45_EMJ_pg04-45 6/4/14 9:00 AM Page 22