HIGH HOPES IN THE PIL­BARA

Hope Downs, lo­cated in the Pil­bara re­gion of WA, com­prises three suc­cess­ful ma­jor open pit mines (Hope 1 North, Hope 1 South and Hope 4) pro­duc­ing high-grade lump and fines prod­ucts, and re­cently added an­other mine, Baby Hope, the lat­est to be suc­cess­full

The Australian Mining Review - - FRONT PAGE - RAY CHAN

They say hope springs eter­nal, and by all ac­counts, Hope Downs is look­ing at op­ti­mistic times in the wake of record iron ore prices and chal­leng­ing COVID-19 con­di­tions.

The 2019 Rio Tinto fourth quar­ter re­port re­vealed the en­tity pro­duced 48.26mt of iron ore last year, rep­re­sent­ing one of Aus­tralia’s largest and most suc­cess­ful iron ore projects in the lower cost quar­tile.

De­vel­op­ment of the new Baby Hope de­posit will help sus­tain ex­ist­ing ca­pac­ity at the Hope Downs 1 op­er­a­tion, sup­port­ing on­go­ing jobs at Hope Downs.

GE­OL­OGY

The Hope Downs mines are lo­cated in the Hamer­s­ley Group in WA’s Pil­bara, which forms the mid­dle layer of Mount Bruce Group in the Marra Mamba iron for­ma­tion.

The sec­tion con­tains rocks dated to the Ar­chaean and Palaeo­pro­tero­zoic ages, and was min­er­alised as a re­sult of the vol­canic erup­tion and sed­i­men­tary se­quence of the Mount Bruce Su­per Group.

The Marra Mamba for­ma­tion is clas­si­fied into Mount New­man, MacLeod Mem­ber and Nam­muldi Mem­ber.

The up­per­most Mount New­man Mem­ber is 65m thick at Hope Down and hosts ma­jor min­er­al­i­sa­tion.

The low­er­most Nam­muldi Mem­ber is 109m thick at Hope Downs and com­prises fewer iron ore de­posits. The for­ma­tion con­tains haematite and goethite with high-graded iron ore de­posits and low-graded sil­ica, phos­pho­rus, car­bon­ate, mag­neta and chert con­tam­i­nants.

The Hamer­s­ley Range con­tains 80pc of all iden­ti­fied iron ore re­serves in Aus­tralia and is one of the world’s ma­jor iron ore prov­inces.

The project leases are es­ti­mated to have 1450mt of mine­able ore, and the mines to have an ex­pected life of more than 30 years. Han­cock Prospect­ing con­tin­ues to ex­plore for iron ore de­posits and grow its min­eral re­source in­ven­tory though a num­ber of ex­plo­ration ten­e­ments in the Pil­bara.

HIS­TORY

The de­vel­op­ment of Hope Downs traces back to 1992, when Hope Downs iron ore (HDIO), a sub­sidiary of Han­cock Prospect­ing (HPPL) and part of the Han­cock Group, se­cured a State Agree­ment for tem­po­rary ten­e­ments in De­cem­ber that year, nine months af­ter the pass­ing of HPPL founder Lang Han­cock.

Based on that more se­cure ti­tle, Han­cock was able to progress ex­plo­ration and eval­u­a­tion work, then fin­ished a prefea­si­bil­ity study and com­menced a Bank­able Fea­si­bil­ity Study un­der the ex­ec­u­tive chair­man­ship of Mr Han­cock’s daugh­ter, Gina Rine­hart, whose mother Hope was the in­spi­ra­tion for the com­pany name.

In 1998, af­ter a world­wide search, HDIO se­cured Is­cor of South Africa as a part­ner to help fund the com­ple­tion of the Hope Downs BFS, given that HPPL then had in­ad­e­quate money to timely fi­nalise an ex­pen­sive bank­able fea­si­bil­ity study.

How­ever Is­cor then un­bun­dled, a process by which a com­pany with sev­eral dif­fer­ent lines of busi­ness re­tains core busi­nesses while sell­ing off as­sets, prod­uct lines, di­vi­sions or sub­sidiaries.

The part­ner evolved into Kumba, a smaller and less fi­nan­cially strong com­pany, which later then suc­cumbed to a hos­tile takeover by An­glo, which had al­ready com­mit­ted to the South African Gov­ern­ment that it would fo­cus its iron ore in­vest­ments in the Cape coun­try.

Throw­ing more span­ners in the works were var­i­ous other events, in­clud­ing among other things, ne­go­ti­a­tions to share in­fra­struc­ture with BHP Bil­li­ton iron ore, and set­tle­ment of the Por­te­ous lit­i­ga­tion (which in­volved fi­nan­cial claims for Hope Downs, which needed res­o­lu­tion prior to fi­nance be­ing achiev­able).

This caused a prob­lem for the Hope Downs project, in­clud­ing its ti­tle con­tin­u­ing, as the state agree­ment in­cluded that the Hope Downs project must sub­mit a timely fi­nance­able de­vel­op­ment pro­posal, or risk be­ing in breach and sub­ject to de­fault and loss.

Af­ter a suc­cess­ful ar­bi­tra­tion, and dif­fi­cul­ties with ac­cess­ing Port Hed­land (the then se­lected port for Hope Downs), on July 1, 2005, Kumba / An­glo was re­placed by Rio Tinto Iron Ore, when the com­pany an­nounced an agree­ment to en­ter into the Hope Downs Joint Ven­ture (HDJV), a 50/50 joint ven­ture be­tween the two par­ties.

The in­volve­ment of a new part­ner in­volved a fur­ther se­lec­tion process and much work, in­clud­ing a ma­jor re­write of the draft de­vel­op­ment pro­posal. Pro­duc­tion fi­nally kicked off in Novem­ber 2007, when out­put from the ini­tial $1.3b Hope Downs mine with an ini­tial ca­pac­ity of 15mtpa - was achieved with first rail­ing of ore over the new Lang Han­cock Rail­way (named in hon­our of Mr Han­cock) to Dampier.

The zone was de­vel­oped in two stages, with the first stage in­creas­ing the mine’s ca­pac­ity to 25Mtpa. Fol­low­ing the suc­cess of this first mine, fur­ther in­vest­ment en­abled the com­mence­ment one year later of its sec­ond ma­jor mine, Hope South, which in­creased pro­duc­tion ca­pac­ity to about 31mtpa.

Hope Downs North and Hope Downs South are both pri­mar­ily Marra Mamba de­posits and are distinct de­posits that form part of the so-named Hope 1.

Fol­low­ing the achieve­ments at both Hope 1 North and South, Hope Downs 4 (which had had a suc­cess­ful prefea­si­bil­ity study un­der­taken by Han­cock prior to Rio Tinto’s in­volve­ment) was sub­se­quently de­vel­oped and be­gan pro­duc­tion in 2013.

Hope 4 is a Brock­man-hosted iron ore de­posit lo­cated about 30km north of New­man, with a 2016-mea­sured re­serve of 162mt, and cur­rently pro­vides pro­duc­tion ton­nage of about 15mtpa. Hope Downs 4 had a cap­i­tal cost of about $1.2bn. Rio Tinto pro­vided an ad­di­tional $425m for con­nect­ing the mine to ex­ist­ing rail, power and port in­fra­struc­ture.

BABY STEPS

In 2018, Rio Tinto and Han­cock Prospect­ing opened Baby Hope, a new mine at Hope Downs. An ex­cit­ing part of the ini­tia­tive is a com­mit­ment from the JV part­ners to­wards in­vest­ment in greater au­to­ma­tion, driv­ing pro­duc­tiv­ity and im­prov­ing safety.

De­vel­op­ment of the Baby Hope de­posit will help sus­tain ex­ist­ing ca­pac­ity at the Hope Downs 1 op­er­a­tion, sup­port­ing on­go­ing jobs at the site.

By the end of this year, a to­tal of 28 ex­ist­ing haul trucks at the Hope Downs 1 mine will be retro­fit­ted with Au­ton­o­mous Haulage Sys­tem (AHS) tech­nol­ogy, while three pro­duc­tion drills at the Hope Downs 4 mine will also be retro­fit­ted with Au­ton­o­mous Drilling Sys­tem (ADS) tech­nol­ogy.

This de­ploy­ment will de­liver safety ben­e­fits to both haulage and drilling oper­a­tions as well as pro­duc­tiv­ity gains to the busi­ness through a higher util­i­sa­tion rate of the ex­ist­ing fleet. Ac­cord­ing to Rio Tinto Iron Ore chief ex­ec­u­tive Chris Sal­is­bury, the in­vest­ment would en­sure sus­tain­able pro­duc­tion lev­els at the Hope Downs 1 op­er­a­tion.

“It’s a clear demon­stra­tion of our con­tin­u­ing com­mit­ment to the peo­ple of WA and the joint ven­ture part­ner­ship,” he said. “To­gether, we have played an in­stru­men­tal role in de­vel­op­ing the Pil­bara and re­main com­mit­ted to pi­o­neer­ing new ways to in­no­vate and im­prove our busi­ness for the fu­ture.

“As we in­tro­duce au­ton­o­mous tech­nol­ogy across the busi­ness we con­tinue to work closely with our em­ploy­ees to de­velop their ca­reer path­ways. “To date, we have suc­cess­fully re­de­ployed or up­skilled em­ploy­ees im­pacted by au­to­ma­tion and we would ex­pect this trend to con­tinue with the ex­ten­sion of this tech­nol­ogy at Hope Downs.”

HPPL Group Ex­ec­u­tive Chair­man Gina Rine­hart ac­knowl­edged the con­tri­bu­tion from Rio, say­ing its par­tic­i­pa­tion had of­fered em­ploy­ment and more in­di­rect em­ploy­ment and op­por­tu­ni­ties to many Aus­tralians over decades.

“Han­cock, had over years, com­pleted a fea­si­bil­ity study, al­beit with ore des­tined to go out not on Rio Tinto’s in­fra­struc­ture, but our money was very lim­ited, and we couldn’t do all we wanted to do at Hope Downs,” she said. “We needed a big­ger com­pany like Rio for in­vest­ment.”

“I hope ev­ery­one who has been in­volved along the way are proud of our in­dus­try, and our con­tri­bu­tion to the Pil­bara and our state that Hope Downs makes.It has changed WA from be­ing a men­di­cant hand­out state, which couldn’t sup­port it­self, to one which sup­ports other states.”

“I am ex­cited that the Baby Hope mine will be a wel­come con­trib­u­tor to the fu­ture suc­cess of Hope Downs.”

Ms Rine­hart said Hope Downs was very spe­cial to Han­cock. It was named af­ter a very spe­cial and beau­ti­ful lady, my mother Hope, a truly won­der­ful West Aus­tralian,” she said.

“My fa­ther, Lang Han­cock, whose flights of dis­cov­ery en­tailed him risk­ing his life many times, was re­spon­si­ble for find­ing a sig­nif­i­cant num­ber of ma­jor iron ore de­posits in the Pil­bara, in­deed about 10 of which now form ma­jor mines for Rio Tinto, plus Hope Downs.”

HPPL ex­ec­u­tive di­rec­tor Tad Wa­troba, who has been in­volved in the Hope Downs project since 1991, said the open­ing of any new mine was al­ways the re­sult of a sig­nif­i­cant amount of ef­fort and hard work from a team of peo­ple.

“Gina Rine­hart’s drive, hard work, de­ter­mi­na­tion and vi­sion over decades has been es­sen­tial in de­vel­op­ing Hope Downs,” he said. “It was not an easy path for Han­cock, a then small com­pany, to com­plete years of hard work to progress these ma­jor mines which make a huge con­tri­bu­tion to Aus­tralia.”

CUL­TURE CLUB

The project has a work­force across a range of cul­tures and op­er­ates with an ex­cel­lent record in the ar­eas of health and safety. Main­tain­ing these high stan­dards and re­li­a­bil­ity for its cus­tomers are key ar­eas of man­age­ment fo­cus.

The risks that needed to be over­come – the ef­forts, fo­cus, hard work, per­sis­tence and in­vest­ment by HPPL and its sub­sidiary over many years – have built a foun­da­tion for many suc­cess­ful projects, which the com­pany ex­pects will hold it in good stead to con­tinue to con­trib­ute to the growth of WA and the na­tion.

Copy­right 2018 Rio Tinto

The Hope Downs mi­ne­site at night.

2018 Rio Tinto Copy­right

Iron ore gets trans­ported via the Lang Han­cock Rail­way to Dampier.

Copy­right 2018 Rio Tinto

Hope Downs pro­duced 48.26mt of iron ore last year, rep­re­sent­ing one of Aus­tralia’s largest and most suc­cess­ful iron ore projects in the lower cost quar­tile.

Copy­right 2018 Rio Tinto

The work­ers’ vil­lage camp at Hope Downs.

Copy­right 2018 Rio Tinto

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