WA’s big slice of Rio’s $3.5b

Pilbara News - - News - Peter de Krui­jff

About 70 per cent of the $3.5 bil­lion bud­get for the iron ore mine Rio Tinto has hailed as its most tech­no­log­i­cally ad­vanced will go into WA busi­nesses.

Phase one of the Koodaideri project, an­nounced last week, will gen­er­ate 2000 jobs dur­ing con­struc­tion, which will start next year, and 600 op­er­a­tional jobs in 2021.

It is the last of three ma­jor Pilbara iron ore projects this year to re­ceive a fi­nal in­vest­ment de­ci­sion af­ter BHP’s $5 bil­lion South Flank project and FMG’s $1.8 bil­lion Eli­wana mine. Koodaideri will have an an­nual ca­pac­ity of 43 mil­lion tonnes with a 13-year mine life.

Rio has ap­proved a $44 mil­lion pre-fea­si­bil­ity study for a sec­ond phase, which could ex­pand pro­duc­tion to 70mtpa.

Rio’s global head of projects David Joyce said the mine, about 110km from New­man, would be a game changer.

“It will set a new bench­mark in terms of the in­dus­try’s adop­tion of au­toma­tion, data an­a­lyt­ics and ma­chine learn­ing, all with the aim of bol­ster­ing safety and pro­duc­tiv­ity,” he said. “The project will de­liver a lot of op­por­tu­ni­ties for lo­cal and Aus­tralian busi­nesses and we ex­pect more than $3 bil­lion will be pro­vided to Aus­tralian com­pa­nies and at least $2.5 bil­lion of those will cer­tainly be op­por­tu­ni­ties to WA-based com­pa­nies.”

Rio says the op­er­a­tion will have “70 in­no­va­tions” in­clud­ing an au­to­mated work­shop, fully in­te­grated mine au­toma­tion and a dig­i­tal replica of the pro­cess­ing plant work­ers can ac­cess in real time.

The com­pany will need to lay 166km of rail to con­nect to its ex­ist­ing net­work and build other in­fra­struc­ture such as an airstrip.

Koodaideri was ini­tially fore­cast to cost $3 bil­lion.

Rio iron ore chief ex­ec­u­tive Chris Sal­is­bury said in­fla­tion had been built into the new es­ti­mate.

“We have changed the scope as well,” he said. “We have added an air­port, new ac­cess road, some other in­fra­struc­ture, and if you ac­tu­ally re­move those things and com­pare it to other projects be­ing ap­proved in the State, the cap­i­tal in­ten­sity is sim­i­lar,” he said.

“We’re sat­is­fied we have a ro­bust es­ti­mate and we can de­liver the project for $US2.6 bil­lion ($3.5 bil­lion).”

Mr Sal­is­bury said the com­pany was on track to reach 360mtpa in its iron ore op­er­a­tions from the end of next year and its push for full au­ton­o­mous trains was likely to be reached by the end of this year.

He said the work­force for Koodaideri would be fly-in, fly-out, and many of the 600 jobs would be based at the mine as op­posed to Rio’s op­er­a­tions cen­tre in Perth.

“Of course, we’ll see the bal­ance of roles shift from con­ven­tional min­ing engi­neer­ing to other types of data sci­en­tists, mecha­tron­ics, those sorts of things,” Mr Sal­is­bury said. “We’re al­ready em­ploy­ing those peo­ple to­day.”

He said Rio con­tributed $27 bil­lion to the WA econ­omy last year, the equiv­a­lent of about 12 per cent of the gross State prod­uct.

Premier Mark McGowan said the start of Koodaideri and other projects showed there was con­fi­dence in the WA econ­omy.

“It re­in­forces the fact that the econ­omy has turned a cor­ner and we’re out of re­ces­sion, our un­em­ploy­ment rate is com­ing down, our growth rate is pick­ing up,” he said.

Chris­tian Spro­goe Pho­tog­ra­phy

The Koodaideri project will use the lat­est tech­nol­ogy.

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