24 April 2014
Sydney Morning Herald
BHP Billiton iron ore president Jimmy Wilson says greenfield mine developments are still possible in Western Australia this decade, even though the sector has crimped capital spending to shift focus on boosting production from existing assets.
Mr Wilson officially opened BHP Billiton’s $US3.2 billion ($3.5 billion) Jimblebar mine in the Pilbara on Wednesday, capping off an extraordinary expansion for the world’s biggest miner and the broader resources sector.
It is one of the last mines to open, with just Gina Rinehart’s 55 million tonne per annum Roy Hill project left to complete, which is expected next year.
Mr Wilson said miners across WA were going to “chase down” efficiency but this did not mean no new mines would be built in the coming decade.
“To say this will be the last greenfields mine outside of Gina’s (Rinehart) facility going up I think would be a bit of stretch,” Mr Wilson said.
He said raw steel production in China grew at 24 per cent in the first half of the last decade, slipping to 12 per cent and forecast to grow this decade by 3.4 per cent.
Jimblebar delivers 35 million tonnes per annum of ore but has capacity to generate 55 million tonnes. This additional 20 million tonnes is part of a broader push by BHP to boost production to between 260 million tonnes to 270 million tonnes from its current mine operations.
BHP anticipates producing 217 million tonnes of ore by June 30. In 2002 BHP’s annual production was just 72.5 million tonnes.
It has upgraded its iron ore production guidance twice this year after improving its operations generated better than expected production output.
He declined to say when BHP could reach 270 million tonnes. “We certainly have an aspiration to get there as soon as we practically can,” Mr Wilson said. “That will require some capital investment within our organisation.”
He continues to expect the iron ore price to weaken in the face of lower cost production displacing high cost producers.
“Lower cost and high volume production will put pressure on iron ore prices,” Mr Wilson said, but he declined to give a long-term forecast for the commodity, which has been volatile this year.
“I can assure you if I did it would be wrong anyway,” Mr Wilson said.
He said lump premiums were strong.
Jimblebar is the first BHP mine to use autonomous trucks, which are trucks without drivers that are operated in the control centre. There are currently six such trucks on the mine, this will double to 12 in the coming months, representing about half the fleet on the site.
The trucks are part of broad changes to equipment and operations lowering costs to extract ore.
Premier Colin Barnett, who was on hand to officially open Jimblebar, said the mining industry would continue growing in WA but not at the stellar rates of the past decade.
“We will see further growth but we won’t see another doubling in the next decade,” Mr Barnett said. “I’m sure there will be new greenfield projects but they will replace mines that have run their course.”
Courtesy of the Sydney Morning Herald
24 April 2014