BHP Billiton today signalled a new era of growth at its Western Australian iron ore operations with the official opening of the new Area C mine by the Premier of Western Australia, the Hon. Geoff Gallop (MLA).
The opening of the US$213 million mine (BHP Billiton share US$181 million), rail and processing facilities also marked the start of a new joint venture with leading South Korean steel maker POSCO.
Construction of the Area C mine and associated rail link was completed three months ahead of schedule and within budget. The mine has a design capacity to produce up to 15Mt of ore per annum, however the plant and equipment have been designed to allow further expansions in line with future market requirements.
A total of 1.8 million man-hours were spent in the construction of the Area C mine and railway without a lost time injury, and over 84 per cent of the capital expenditure was spent in Western Australia, with significant sourcing of business and manpower from the Pilbara.
Area C is located 120 kilometres north west of Newman and contains a mineral resource of some 820 million tonnes (Mt) of MAC™ Marra Mamba ore. Initial mining is being carried out at the ‘C Deposit’, which has an ore reserve of 204Mt.
The mine is connected, via a 39-kilometre spur line, to the railway system linking BHP Billiton Iron Ore’s existing mines at Newman and Yandi to its ship loading facilities at Port Hedland.
President Western Australian Iron Ore and Boodarie Iron Graeme Hunt said the opening of Area C was an important step in the Company’s strategy to introduce new high ‘Value in Use’ iron ore products to meet the needs of high technology customers.
“MAC™ ore, along with the pisolitic ores from Yandi and Hematite ores from Newman, will ensure that we have a diverse range of quality products to meet the ongoing growth in demand from the Asian region, particularly China.
“The Area C development, along with expansions to our railroad, port and other mines, will enable us to achieve a system capacity of 100Mt by mid 2004.
“In addition, we are aiming to bring on new capacity, in line with market demand, to ensure we maintain our share of the global seaborne iron ore market,” he said.
Mr Hunt also acknowledged the important role played by BHP Billiton Iron Ore’s valued joint venture partners over many years “Itochu and Mitsui have been associated with the Company in its iron ore developments since the birth of the Pilbara iron ore industry in the late 1960s. Their commitment and support has been crucial to the success of our Western Australian iron ore business.
“Today I am also pleased to welcome our largest single customer, POSCO, as a new partner in the Pilbara mining fraternity,” he said.
Under the POSMAC joint venture, POSCO has committed to purchase three million tonnes per annum of MAC™ ore and to maintain a long-term strategic alliance with BHP Billiton Iron Ore for the supply of other iron ore products.
President and Chief Executive Officer of POSCO, Mr Kang, Chang-Oh, said that the joint venture is an excellent model of iron ore suppliers and steelmills working together to take an existing relationship to an even higher level of collaboration and shared success.
“BHP Billiton has played an essential role in the development of many steel producers around the world and continues to do so by, among other things, providing high quality iron ore,” he said.
“Our two companies have enjoyed a long standing and cooperative relationship as a stable supplier and a faithful customer for over 30 years. Today, we have entered a new stage of strategic alliance between our two companies.
“POSCO’s investment in this project represents our sincere and dedicated initiative to become a leader in helping to ease the expected tightness in the global iron ore supply chain. I am confident that BHP Billiton’s accumulated expertise and experience in mining will ensure the smooth operations of POSMAC. Its vast reserves, well-developed infrastructure, along with a dedicated workforce will provide a consistent and reliable source of quality Marra Mamba ore for steel producers,” Mr Kang said.
The Area C opening also reflects a new relationship with the traditional landowners, the Innawonga Bunjima Niapaili (IBN) and Martu Idja Banyjima (MIB) people.
“Native Title agreements at Area C ensures the traditional owners will share in the benefits of the mine,” Mr Hunt said.
“During the construction of this project over five per cent of the peak contract workforce of 500 were indigenous – keeping BHP Billiton Iron Ore on track to achieve its goal of 12 per cent indigenous employment for all operations by 2010.”
The Area C operation will employ a permanent workforce of about 150 people. Mining activities will be carried out by contract company Henry Walker Eltin, with BHP Billiton employees undertaking geological and mine planning activities.
First ore was railed from Area C to the port at Nelson Point on 16 August 2003, with the first shipment of MAC™ ore departing the port on 24 September 2003.
The ‘C Deposit’ section of Area C will be developed under the POSMAC joint venture. Participants in the venture are: BHP Billiton (65 per cent), POS-Ore Pty Ltd (20 per cent), CI Minerals Australia Pty Ltd (8 per cent) and Mitsui Iron Ore Corporation Pty Ltd (7 per cent).
(The information in this release that relates to Area C Mineral Resources and Ore Reserves is based on information compiled by M. Kneeshaw, FAusIMM and P. Schultz, MAusIMM who are full time employees of BHP Billiton Iron Ore Pty Ltd. Both Mr Kneeshaw and Mr Schultz have sufficient experience, which is relevant to the style and type of deposit and to the activity that is undertaken to qualify as a Competent Persons as defined in the 1999 edition of the "Australasian Code for Reporting of Minerals Resources and Ore Reserve”. The Competent Persons consent to the inclusion in this release of the matters based on their information in the form and context in which they appear.)
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