The Australian Mining Review

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

- 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.

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 ?? Copyright 2018 Rio Tinto ?? The Hope Downs minesite at night.
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.
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 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 The workers’ village camp at Hope Downs.
 ?? Copyright 2018 Rio Tinto ??
Copyright 2018 Rio Tinto

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