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NEWS-LEADING DEVELOPMENTS 4 E&MJ; • SEPTEMBER 2017 www.e-mj.com Fluor's Phosphate Megaproject in Saudi Arabia Begins Production The Ma'aden Wa'ad Al-Shamal Phos- phate Co.'s (MWSPC) Umm Wu'al phos- phate project in Saudi Arabia has started production of ammonia, merchant-grade acid and fertilizer. Fluor is providing overall program management services for this $8 billion megaproject, in ad- dition to engineering, procurement and operations and readiness services for various scopes. "As part of Saudi Arabia's Vision 2030, this world-class project will have a long-lasting impact on the region, as it diversifies the country's economy and cre- ates local job opportunities for citizens," said Tony Morgan, president of Fluor's Mining and Metals business. "After less than four years from the start of the exe- cution phase, we are proud to have part- nered with Ma'aden to bring this facility to production. We look forward to continuing our partnership with Ma'aden in develop- ing their next phase of mining projects in Saudi Arabia through our recently signed memorandum of understanding." Production has begun on a diammoni- um phosphate fertilizer, merchant-grade acid and ammonia. Phosphate serves as a key element in fertilizer for agricultur- al crops. As one of the largest integrated phosphate fertilizer plants in the world, the facility will help meet global food supply needs by delivering 3 million met- ric tons per year of diammonium phos- phate and nitrogen, phosphorous and potash fertilizers. With a peak site workforce of 28,000 from more than 50 nationalities, Fluor implemented its world-class safety pro- grams, including its Life Critical program, to support the project. As a result of these programs, the project has achieved more than 46 million consecutive work hours without a lost-time incident. MWSPC is a joint venture between Ma'aden, a Saudi Arabian mining compa- ny, Mosaic and Saudi Arabia Basic Indus- tries Corp. (SABIC). BHP Reports Strong Results BHP Billiton recently reported a profit of $5.9 billion, which includes an excep- tional loss of $842 million (after tax), compared to an attributable loss of $6.4 billion, including an exceptional loss of $7.6 billion (after tax), in the prior peri- od. The loss was related to the Samarco dam failure and the strike at Escondida, and was partially offset by a reimburse- ment for the cancellation of the Caroona exploration license. "We had a very strong financial year," said Andrew Mackenzie, CEO, BHP. "Free cash flow was $12.6 billion, our second highest on record. We used this cash to reduce net debt by nearly $10 billion and return $4.4 billion to shareholders. Pro- ductivity gains across our simpler portfo- lio of tier one assets increased our return on capital to 10%." Mackenzie expects the momentum to continue through the 2018 financial year, with volume growth of 7% and further productivity gains. "Our relentless focus on cash flow, capital discipline and value creation should allow us to significant- ly increase our return on capital by the 2022 financial year," Mackenzie said. BHP reported a 4% decline in copper equivalent costs compared to the 2016 financial year. Escondida and West- ern Australia iron ore (WAIO) unit cash costs decreased by 17% and 3%, re- spectively. Queensland coal costs in- creased by 8%. "Escondida unit costs were lower as a result of continued productivity im- provements and favorable inventory movements," Mackenzie said. "If costs related to the industrial action were in- cluded, Escondida unit costs would have been $1.13/lb." WAIO unit costs declined due to re- ductions in labor and contractor costs and productivity improvements. Queensland coal unit costs were higher as sales vol- umes were impacted by Cyclone Debbie. During the 2017 financial year, the Escondida water supply projects were completed. A new desalination facility will ensure a steady water supply for the operation. At the Jansen potash project, BHP reported that excavation and lining of the shafts are steadily progressing. Both shafts have been safely excavated and lined through the Blairmore aquifer. "With a later market window now antic- The MWSPC facility will produce 3 million metric tons per year (mt/y) of diammonium phosphate and nitrogen, phos- phorous and potash fertilizers.