At last – the $10 bil­lion Roy Hill mine has hit its 55 mil­lion tonne per an­num run rate. Af­ter over­com­ing sig­nif­i­cant ore­body chal­lenges dur­ing ramp up, the miner is now post­ing tidy prof­its as it nears the end of a 90 day lenders test to demon­strate sust

The Australian Mining Review - - ROY HILL - EL­IZ­A­BETH FABRI

IT has been a rocky road to full pro­duc­tion for Roy Hill since send­ing off its first ship­ment in De­cem­ber 2015.

Teething is­sues en­coun­tered with the ore­body caused a se­ries of de­lays, push­ing what was orig­i­nally sched­uled to be com­plete by the end of 2016, back un­til late 2017.

It was a tough time for the miner, but af­ter much per­se­ver­ance and the in­tro­duc­tion of a new jaw crush­ing sys­tem to han­dle harder ore, the long-awaited tar­get was met in Septem­ber when pro­duc­tion hit 4.8 mil­lion tonnes (the equiv­a­lent of 55mtpa on an an­nu­alised ba­sis).

Re­flect­ing on com­pli­ca­tions at a re­cent WA Min­ing Club lunch, Roy Hill chief ex­ec­u­tive Barry Fitzger­ald de­scribed this time as a “hor­ri­ble pe­riod” for the com­pany.

“The re­al­ity was that the ore­body had a few more dif­fi­cul­ties than we thought and the ma­te­rial was much harder,” Mr Fitzger­ald said.

“I can as­sure you that there were some in­ter­est­ing ques­tions around the busi­ness about whether we were ever go­ing to get out of that.

“We had sig­nif­i­cant wear [on the plant] that we hadn’t fore­seen be­cause when we started the project seven years ago all the ex­perts said to me: ‘Barry you will never make 40 per cent lump, that ma­te­rial is so soft’.

“I am happy to say 18 months on we have got some of the hard­est ma­te­rial in town.”

The miner was also in a stronger fi­nan­cial po­si­tion.

Ac­cord­ing to an Aus­tralian Se­cu­ri­ties and In­vest­ments Com­mis­sion fil­ing, Roy Hill posted a profit of $331 mil­lion for the 12 months end­ing June 30 2017, com­pared to a $34 mil­lion loss the pre­vi­ous year.

Roy Hill was also the proud owner of a grow­ing tro­phy col­lec­tion; af­ter re­ceiv­ing a hand­ful of na­tional in­dus­try awards in 2016, Roy Hill and its ex­ec­u­tive chair­man Gina Rine­hart were recog­nised on an in­ter­na­tional level in May 2017, snap­ping up the Ris­ing Star and Life­time Achieve­ment awards, re­spec­tively, at the Lon­don Platts Global Me­tals Awards.

In Oc­to­ber, Roy Hill also picked up the 2017 Golden Gecko Cer­tifi­cate of Merit, for its in­no­va­tive and best prac­tice ap­proach to us­ing its ex­ist­ing min­ing tech­nol­ogy to track and man­age re­ha­bil­i­ta­tion ma­te­ri­als.

In Novem­ber, the award streak con­tin­ued when Mrs Rine­hart and Barry Fitzger­ald re­ceived dual ac­co­lades at the CEO Magazine 2017 Ex­ec­u­tive of the Year Awards.

Com­plet­ing (and pass­ing) a 90 day lenders test was the next hur­dle, which all go­ing well was ex­pected to be ticked off by Christ­mas.

“This is im­por­tant to com­plete to en­sure that we meet our obli­ga­tions to our lenders and own­ers,” Mr Fitzger­ald told The Aus­tralian Min­ing Re­view.

“To date, con­sis­tency in ma­te­rial (pri­mar­ily hard­ness) and min­er­al­ogy have been our big­gest chal­lenges.

“Im­proved ore body knowl­edge is en­abling us to bet­ter man­age and op­ti­mise our min­ing, pro­cess­ing and lo­gis­tics by know­ing in ad­vance what type of ma­te­rial will present.”

Ad­vanc­ing tech­nol­ogy

Roy Hill was also soon to join its three Pil­bara ri­vals – BHP, Rio Tinto and Fortescue Me­tals Group – in the roll out of au­tonomous trucks across its op­er­a­tions.

The in­tro­duc­tion of driver­less trucks was part of its Smart Mine pro­gram, which aimed to iden­tify, de­velop and de­liver so­lu­tions across its op­er­a­tions.

The plan in­cluded test­ing and im­ple­ment­ing the lat­est tech­nol­ogy to cre­ate a ‘dig­i­tal twin’ of the phys­i­cal ore body; evolv­ing and de­vel­op­ing the mine plan­ning and ex­e­cu­tion ca­pac­ity to reflect the in­creased un­der­stand­ing of the ore body, and a se­ries of au­to­ma­tion ini­tia­tives.

The miner had al­ready be­gun in­stalling cruise con­trol on its rail sys­tem, and sev­eral au­tonomous drills.

The next step was a phased roll out of the au­tonomous trucks, be­gin­ning in the sec­ond half of 2018.

“Our cur­rent plan will see a small fleet of six trucks be­ing tri­alled in 2018 and then pro­gres­sively rolled out through to 2021,” Mr Fitzger­ald said.

“This will com­ple­ment our cur­rent drill pro­gram where we have three of the nine Pit-Viper drills au­to­mated.

“The re­main­ing six drills will be com­pleted in 2018.”

When asked how the move to au­tonomous trucks and drills will ef­fect jobs, Mr Fitzger­ald said it “will change some ex­ist­ing roles and re­sult in new roles emerg­ing”.

“The fu­ture of work and the work­force is fac­ing rapid changes brought about by tech­nol­ogy, glob­al­iza­tion and so­cial values,” he said.

“Our per­sonal lives, the min­ing in­dus­try and other in­dus­tries are be­ing dis­rupted and the rate of change is ac­cel­er­at­ing.

“We are de­vel­op­ing a plan that in­cludes path­ways for peo­ple to learn ad­di­tional skills with a mix of au­to­ma­tion and man­ual.”

Over the next 12 months, Roy Hill will bring on an­other 300 work­ers, tak­ing its to­tal to about 2000 em­ploy­ees.

“Roy Hill’s vi­sion is to be a high per­form­ing iron ore busi­ness where peo­ple con­trib­ute and re­alise their full po­ten­tial,” Mr Fitzger­ald said.

“The at­ti­tude, skills, knowl­edge and ca­pa­bil­i­ties of our peo­ple are fun­da­men­tal to our suc­cess.

“Our suc­cess has been pos­si­ble with an ex­cep­tional team, a strong cul­ture, and a care­fully planned and co­or­di­nated ef­fort from con­cep­tion to com­mis­sion­ing and op­er­a­tions.”

All im­ages: Roy Hill.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.