Iron ore mining in Western Australia

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Iron ore mining in Western Australia
Tigris-Australia location Western Australia.svg
Position of Western Australia within Australia highlighted
Location
State Western Australia
Country Australia
Regulatory authority
Authority Department of Mines and Petroleum
Website Official website
Production
Commodity Iron ore
Production Increase 390.77 million tonnes
Value Increase A$48.542 billion
Employees Increase 27,537
Year 2010 [1]

Iron ore mining in Western Australia, in the financial year 2008-09, accounted for 47 percent of the total value of the state's resources, with a value of A$33.56 billion. The overall value of the mineral and petroleum industry in Western Australia was A$71.3 billion in 2008-09, a 19 percent increase compared to the previous financial year.[2]

Western Australia's iron ore output for 2011 was 474 million tonnes, 97% of Australian production. The bulk of Western Australian ore went to China, which imported 70% percent of 2010 production, followed by Japan with 19% and South Korea with 10%. The state has the world's largest Economic Demonstrated Resources of iron ore with 22% of the world's iron ore followed by Brazil with 17%, Russia with 15% and China with 14%.[3][4]

In the fiscal year 2011-2012, the Western Australian Government received over A$3.9 billion in royalties from the iron ore mining industry in the state.[5][6]

History[edit]

While iron ore deposits were known, like the Mount Whaleback deposit discovered in 1957 by Stan Hilditch, it was not until 1960, when the Australian Government lifted the embargo on iron ore exports it had put in place because of concerns the mineral was in short supply, that mining began in earnest.[7] Up until the mid-1960s, iron ore production in Western Australia, and Australia as a whole, was negligible, in the range of less than 10 million tons a year. By the mid-1970s, this figure had reached 100 million tonnes, with the majority coming from Western Australia. Production slightly declined in the 1980s but it improved in the 1990s, reaching 150 million tonnes for the country by 1997 and 200 million tonnes by 2003.[2]

The first mine in the Pilbara, the Goldsworthy mine, was developed by Utah Development Co. in 1965. A private railway line, the Goldsworthy railway, as well as port facilities at Finucane Island, Port Hedland, were also constructed. On 1 June 1966, the first shipment of iron ore from the Pilbara left on board the Harvey S. Mudd.[8][9]

BHP's operations in Newman date back to 1968, when the Mount Whaleback mine was opened, the biggest single-pit Open-pit iron ore mine in the world. A new town, Newman, was constructed, as well as a 426 kilometre railway line, the Mount Newman railway. The first train left Newman on 1 January 1969 and the first shipment of Newman ore left port on 1 April 1969 on board of the Osumi Maru.[9] Newman remained a "closed" company town until 1981.[7]

Rio Tinto's iron ore operations in the Pilbara began in 1966,[10] with the Mount Tom Price mine opened that year, becoming the company's first mine to open in the Pilbara.[11]

Overview[edit]

Exploration[edit]

Quarterly expenditure ($millions) on iron ore exploration in Western Australia since 1988
Early exploration camp at Mount Goldsworthy in 1964.

In 2008-09, expenditure for exploration in iron ore in Western Australia increased by 33 percent compared to the previous financial year, 2007-08. The A$560million spend on iron ore exploration accounted for 45 percent of all mineral exploration expenditure in the state.[2]

Production[edit]

Major commodity mix, 2008-2009.

The bulk of iron ore production in Western Australia comes from the Pilbara region of the state. A number of mines however are also located in the Mid West and Kimberley regions as well as in the Wheatbelt.[2]

The big two producers, Rio Tinto and BHP Billiton accounted for 90 percent of all iron ore production in the state in 2008-09, with the third-biggest producer being the Fortescue Metals Group.[2]

Rio Tinto operates twelve iron ore mines in Western Australia, BHP Billiton seven, Fortescue two, all of those are located in the Pilbara region.[2]

Railways[edit]

Pilbara region[edit]

Iron ore mines in the Pilbara region.

As of 2010, only the three big mining companies operate private rail networks for the purpose of transporting iron ore from the mines to the coast.

BHP Billiton operates the Goldsworthy railway and the Mount Newman railway, both terminating at Port Hedland.

Rio Tinto operates the Hamersley & Robe River railway, formed in a 2001 merger of the Hamersley and Robe River lines. The two lines terminate at Cape Lambert and Dampier.

FMG's Fortescue railway is a relative newcomer, having started operation in 2008. The line terminates at Port Hedland.[12] Before deciding to construct its own line, the National Competition Council of Australia received an application from FMG, on 15 June 2004, to use part of the Mount Newman railway and also part of the Goldsworthy railway.[13]

In June 2010, the Australian Competition Tribunal ruled that FMG would be granted access to Rio Tinto's Robe River line and BHP Billiton's Goldsworthy line but not to the busier Hamersley and Mount Newman lines.[14][15] Treasurer Wayne Swan suggested that several advantages would accrue from access to the rail lines by third parties. It would increase competition, reduce duplication of infrastructure, and reduce environmental damage.[16] Atlas Iron, another junior iron ore miner, is hopeful to come to terms with BHP Billiton in regards to using some of the company's rail infrastructure, the Goldsworthy railway, in the future. BHP, in late 2010, had agreed to a joint feasibility study into how an arrangement might work.[17]

Access to the rail networks by third parties is governed by the State Agreements Act.[18]

Westrail region[edit]

Other, generally smaller, mines use the formerly Government railways. Examples include:

Ports[edit]

In the Pilbara, iron ore is shipped from Port Hedland, Dampier and Cape Lambert. The latter two ports are exclusively used by Rio Tinto, while Port Hedland is used by BHP, FMG and Atlas Iron.

Port facilities at Port Hedland consist of Nelson Point and Finucane Island, both BHP, and Herb Elliott Port, used by FMG. In Dampier, ore is shipped from Parker Point and East Intercourse Island.

The non-Pilbara mines ship their ore out of other ports, like the Koolyanobbing mine, which ships from the port of Esperance,[19] or the Koolanooka mine and the Jack Hills mine, which both ship from Geraldton.[20][21]

Projects[edit]

BHP Billiton is currently spending A$1.85 billion on its Rapid Growth Project 4, aimed at increasing its annual iron ore output to 155 million tonnes. To achieve this, upgrades to both mines and port facilities are necessary. The project is scheduled for completion by 2010. As a follow-up, Rapid Growth Project 5, with a budget of A$4.8 billion, targets a further production increase of 50 million tonnes annually. Additionally to upgrades at the mines and ports, it will also include duplication of existing railway lines and is scheduled for completion in late 2011.[2] The Jimblebar mine is part of another expansion project, launched in 2010 and aimed at increasing production from the Pilbara mines to 240 million tonnes of iron ore annually by 2013. The expansion of Jimlebar, together with an expansion of the inner harbour at Port Hedland and works on the duplication of rail tracks is estimated to cost A$2.15billion.[22] The project is titled Rapid Growth Project 6.[23]

Rio Tinto declared its intent to expand the Hope Downs mine, spending a further A$1.78 billion on its new Hope Downs 4 project, scheduled to produce 15 million tonnes of iron ore annually by 2013.[24][25] Rio has commenced construction on its new Western Turner Syncline project. Rio Tinto allocated a further A$1.24 billion in early December 2010, to expand the Brockman 4 mine to 40 million tonnes per annum, from 22, as well as develop its Western Turner Syncline project, raising planned production there from 6 to 15 million tonnes, with the aim of increasing the Pilbara production to 283 million tonnes per annum by late 2013. The expansion would make Brockman 4 Rio Tinto's second-largest mine in the Pilbara.[26] The company has also begun further construction at the port at Cape Lambert, which is scheduled to undergo a further expansion, to be completed by 2012. The new expansion is scheduled to cost A$276million.[27] The expansion is part of a plan to raise Rio's annual production from the Pilbara from 220 to 330 million tonnes annually by 2016. To achieve this, the Cape Lambert port capacity will be expanded to handle an additional 100 million tonnes annually.[28]

Plans by the Fortescue Metals Group to increase production from 39 million tonnes to 55 million tonnes through a US$220 million upgrade of the Cloud Break mine had to be abandoned in October 2009 because of funding difficulties through its Chinese investors. Instead, Fortescue decided to develop its Christmas Creek mine, at a cost of US$360 million, by building a mine and process plant there and linking it to its existing rail network. Christmas Creek is scheduled to produce 16 million tonnes of iron ore in its first year of operation. Fortescue plans to reach an annual production of 95 million tonnes of iron ore by 2012, downgraded from an earlier target of 120 million.[29]

At Cape Preston, CITIC Pacific Mining is currently, as of 2010, in the process of constructing a 27.6 million tonnes per annum magnetite iron ore mine, named the Sino Iron Project.[30]

Export[edit]

China, in 2008-09, was the main importer of Western Australian ore, having taken 64 percent, or A$21 billion in value. Japan was the second-most important market with 21 percent, followed by South Korea with 10 percent and Taiwan with three. In comparison, Europe is a small market for ore from the state, having taken only one percent of the overall production in 2008-09.[2]

Criticism[edit]

General[edit]

The iron ore mining boom in Western Australia experienced since the early 2000s has not exclusively been seen as positive. Communities in the Pilbara region have seen a large influx of residential and Fly-in fly-out workers which has seen land prices skyrocket and has negatively affected tourism as accommodation has become sparse.[31][32]

Australian Aborigines[edit]

Aboriginal culture in the region is deeply connected to the land and water and the mining activities threaten the fragile desert environment of the Pilbara. Locals in the Pilbara argue that the wealth generated by the local mining industry is passing them by and they are left behind. A lack of accommodation and the unattractive nature of relocating to the "dusty outback" resulted in a majority work force of fly-in fly-out workers, depriving local towns of the benefits of a high-earning permanent population.[32]

Mining companies in Australia have, since 1992, changed their attitude towards the local Aboriginal population. In 1992, the Australian government began to recognise the land rights of the Indigenous Australians, opening an opportunity for the latter to engage in negotiations with mining companies to press for compensation and for assistance in preserving cultural artifacts. However, some Aboriginals feel short-changed, given the enormous profits made from mining, and also consider the financial benefits and employment opportunities as insufficient compensation for the destruction caused to their habitat.[32]

Aboriginal mining companies have been able to secure contracts with the big international mining companies. In 2007, BHP Billiton awarded a A$300 million contract to Ngarda Civil and Mining, an Aboriginal-owned company, to manage the mine, the largest ever mining contract awarded to an Aboriginal company.[33][34] As part of the five-year contract, BHP Billiton planned to increase the number of Aboriginal workers at the mine to 70, out of a total of 90 workers. The managing director of Ngarda, Brian Taylor, saw this contract as a positive step, moving Aboriginal people in the region away from government welfare and into permanent employment. Western Australian Aboriginals, in 2007, suffered from an unemployment rate of 14 percent in the state, compared to 3.3% for the general population.[35] Of the 12,000 people employed by BHP Billiton in its the Pilbara operations in 2010, 700 were indigenous. Rio Tinto also, as of 2010, employs 700 indigenous workers in its Pilbara operations, comprising 6 percent of its overall work force. FMG, under the leadership of Andrew Forrest, is driving a national program which aims to find 50,000 jobs for indigenous workers in Australia.[34] Companies like BHP Billiton, FMG and Rio Tinto have programs aimed at increasing the number of Aboriginal employees in their operations.[32] Indigenous Australians in Western Australia in 2001 accounted for 3.1% of the population.

Companies however lack an understanding of Aboriginal culture, which requires young men to be sent to the bush for up to six weeks to hunt and learn about their culture. Companies are often unwilling to award their indigenous employees this time off to be able to perform these important traditions.[34]

Safety[edit]

In the past decade, from 2001 to 2010, 42 employees have lost their lives in the state's mining industry. Of those, gold and iron ore have been the most dangerous, with 14 fatalities each. Of the 42 fatalities, 29 have occurred at the surface and 13 in underground mining. Iron ore last had a fatality-free year in 2006.[36]

Since the late 1960s, when the Department of Mines began categorising fatalities by commodity, until 2010, 86 work-related fatalities have occurred in the iron ore mining industry in Western Australia.[36]

List of active mines[edit]

This is a list of currently active iron ore mines in Western Australia:[2]

Mine Owner 1 Location 2 Regionv Capacity 3 Opening year
Area C mine BHP Billiton Newman Pilbara 42 2003
Brockman mine Rio Tinto Tom Price Pilbara 8.7 1992
Brockman 4 mine Rio Tinto Tom Price Pilbara 22 2010
Channar mine Rio Tinto Paraburdoo Pilbara 20 1990
Christmas Creek mine FMG Nullagine Pilbara 16 2009
Cloud Break mine FMG Nullagine Pilbara 28 2008
Cockatoo Island mine Cliffs Natural Resources Cockatoo Island Kimberley  ? 1951
Eastern Range mine Rio Tinto Paraburdoo Pilbara 20 2004
Hope Downs mine Rio Tinto Newman Pilbara 30 2007
Hope Downs 4 mine Rio Tinto Newman Pilbara 15 2014
Jack Hills mine Crosslands Resources Meekatharra Mid West 2 2006
Jimblebar mine BHP Billiton Newman Pilbara 14 1989
Koolan Island mine Mount Gibson Mining Koolan Island Kimberley 4 2007
Koolanooka mine Sinosteel Midwest Corporation Geraldton Mid West 2010
Koolyanobbing mine Cliffs Natural Resources Southern Cross Wheatbelt  ? 1965
Marandoo mine Rio Tinto Tom Price Pilbara 15 1994
Mesa A mine Rio Tinto Pannawonica Pilbara 25 2010
Mesa J mine Rio Tinto Pannawonica Pilbara 7 1994
Mount Jackson Cliffs Natural Resources Bullfinch Wheatbelt 33 2010
Mount Tom Price mine Rio Tinto Tom Price Pilbara 28 1966
Mount Whaleback mine BHP Billiton Newman Pilbara 38 1968
Nammuldi mine Rio Tinto Tom Price Pilbara 6.6 2006
Orebodies 18, 23 and 25 mine BHP Billiton Newman Pilbara
Pardoo mine Atlas Iron Port Hedland Pilbara 2.4 2008
Paraburdoo mine Rio Tinto Paraburdoo Pilbara 20 1972
Tallering Peak mine Mount Gibson Mining Mullewa Mid West 3 2004
West Angelas mine Rio Tinto Newman Pilbara 29.5 2002
Wodgina mine Atlas Iron Port Hedland Pilbara 4 2010
Yandi mine BHP Billiton Newman Pilbara 41 1992
Yandicoogina mine Rio Tinto Newman Pilbara 52 1998
Yarrie mine BHP Billiton Goldsworthy Pilbara 2 1993
  • 1 Majority-owner and operator shown only.
  • 2 Location refers to nearest town, mines are not necessarily located at this town.
  • 3 Capacity is the production capacity of the mine, as of 2010, not actual annual production, and is in million tonnes of iron ore per annum.

List of inactive and exhausted mines[edit]

This is a list of former iron ore mines in Western Australia:

Mine Owner Location Region Opening year Closing year
Goldsworthy mine Utah Development Co. Goldsworthy Pilbara 1966 1982
Nimingarra mine BHP Biliton Goldsworthy Pilbara 2007
Shay Gap mine Goldsworthy Mining Limited Shay Gap Pilbara 1973 1993

Statistics[edit]

Annual statistics for the Western Australian iron ore mining industry:[1][6][37][38][39][40][41]

Subject 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Production (million tonnes/annum) 158.87 162.25 171.77 194.75 215.85 244.64 250.40 264.45 305.72 341.64 390.77
Production value (A$ billion) 4.365 5.245 5.064 5.061 6.173 11.308 14.751 16.165 31.896 28.085 48.542
Employees 8,604 9,103 9,289 11,184 12,585 13,727 16,203 18,387 23,185 26,051 27,537

References[edit]

  1. ^ a b Western Australian Mineral and Petroleum Statistics Digest 2010 Department of Mines and Petroleum, accessed: 20 August 2012
  2. ^ a b c d e f g h i Western Australian Mineral and Petroleum Statistic Digest 2008-09 Department of Mines and Petroleum website, accessed: 26 November 2010
  3. ^ Virginia Christie, Brad Mitchell, David Orsmond & Marileze van Zyl (March 2011). "The Iron Ore, Coal and Gas Sectors". Bulletin – March Quarter 2011. Reserve Bank of Australia. Retrieved 27 Aug 2013. 
  4. ^ Summerfield, Daisy (31 December 2012). "Iron Ore". Australian Atlas of Minerals Resources, Mines & Processing Centres. Geoscience Australia. Retrieved 27 Aug 2013. 
  5. ^ Gerritsen, Natalie (24 Jun 2013). "Moody’s to WA – don’t overstate royalty revenue". The Australian Financial Review. Retrieved 27 Aug 2013. 
  6. ^ a b Western Australian Mineral and Petroleum Statistic Digest 2009 Department of Mines and Petroleum website, accessed: 28 November 2010
  7. ^ a b Newman The Sydney Morning Herald, published: 8 February 2004, accessed: 10 November 2010
  8. ^ "Utah Development profit reflects Japanese price rise". Sydney Morning Herald. 11 December 1973. p. 20. Retrieved 2012-10-01. 
  9. ^ a b History of the Iron Ore Industry and the Pilbara BHP Billiton website, accessed: 10 November 2010
  10. ^ Pilbara Rio Tinto Iron Ore website, accessed: 6 November 2010
  11. ^ The Australian Mines Handbook - 2003-04 edition, editor: Ross Louthean, publisher: Louthean Media Pty Ltd, page: 242
  12. ^ Infrastructure: Rail Fortescue website, accessed: 6 November 2010
  13. ^ Mt Newman Railway National Competition Council of Australia website, accessed: 6 November 2010
  14. ^ Junior miners win limited access to Pilbara rail network lloydslistdcn.com.au, published: 1 July 2010, accessed: 4 November 2010
  15. ^ Watchdog 'can demand Pilbara rail expansion' The Australian, published: 13 May 2010, accessed: 4 November 2010
  16. ^ BHP Billiton, Rio Tinto angry on open Pilbara rail line news.com.au, published: 28 October 2008, accessed: 4 November 2010
  17. ^ Atlas Iron optimistic about using BHP rail line to Port Hedland ABC Rural, published: 23 November 2010, accessed: 24 November 2010
  18. ^ Report on Current Transport and Communications Infrastructure in the Pilbara Murdoch University, accessed: 4 November 2010
  19. ^ KOOLYANOBBING OPERATIONS Cliffs Natural Resources website, accessed: 28 November 2010
  20. ^ Koolanooka/Blue Hills (Haematite) Sinosteel Midwest website, accessed: 28 November 2010
  21. ^ Jack Hills Iron Ore Mine Crosslands resources website, accessed: 28 November 2010
  22. ^ BHP approves a $2bn expansion of WA iron ore operations The Australian, published: 29 January 2010, accessed: 14 November 2010
  23. ^ BHP boosts Pilbara despite EU threat to Rio joint venture The Australian, published: 30 January 2010, accessed: 14 November 2010
  24. ^ Rio Tinto to invest $1.78b in Hope Downs The Sydney Morning Herald, published: 30 August 2010, accessed: 7 November 2010
  25. ^ Rio Tinto proceeds with Hope Downs iron project ABC Rural, published: 31 August 2010, accessed: 7 November 2010
  26. ^ Rio Tinto signals $1.24bn ore expansion The Australian, published: 2 December 2010, accessed: 4 December 2010
  27. ^ John Holland lands Cape Lambert port expansion for Rio The Herald Sun, published: 3 September 2010, accessed: 8 November 2010
  28. ^ Rio announces $226m expansion at Cape Lambert The West Australian, published: 14 July 2010, accessed: 8 November 2010
  29. ^ Fortescue Metals Group's China funding flops The Australian, published: 13 October 2010, accessed: 9 November 2010
  30. ^ Sino Iron Project CITIC Pacific Mining, accessed: 28 November 2010
  31. ^ New Australia Mining Boom Taking Toll on Outback Life - Page 1 National Geographic, published: 26 September 2007, accesssed: 6 December 2010
  32. ^ a b c d New Australia Mining Boom Taking Toll on Outback Life - Page 2 National Geographic, published: 26 September 2007, accesssed: 6 December 2010
  33. ^ Fact Sheet: Yarrie Mine Operations Ngarda Civil and Mining website, accessed: 6 December 2010
  34. ^ a b c Looking for opportunities ABC North West WA, published: 16 February 2010, accessed: 6 December 2010
  35. ^ Indigenous firm wins $300m BHP deal The Australian, published: 5 September 2007, accessed: 6 December 2010
  36. ^ a b Western Australian mining fatalities database accessed: 19 February 2011
  37. ^ Western Australian Mineral and Petroleum Statistics Digest 2008 Department of Mines and Petroleum, accessed: 9 December 2010
  38. ^ Western Australian Mineral and Petroleum Statistics Digest 2006 Department of Mines and Petroleum, accessed: 9 December 2010
  39. ^ Western Australian Mineral and Petroleum Statistics Digest 2004 Department of Mines and Petroleum, accessed: 9 December 2010
  40. ^ Western Australian Mineral and Petroleum Statistics Digest 2002 Department of Mines and Petroleum, accessed: 10 December 2010
  41. ^ Western Australian Mineral and Petroleum Statistics Digest 2001 Department of Mines and Petroleum, accessed: 10 December 2010

External links[edit]