WA Works Autumn 2020 by CCIWA

Supply Chain and Major Project News

Pr Maj BS Lif oje or CR t O cts IB ut ER ON LY

Autumn 2020

Sustaining LNG Sparkling Prospects

Contracting

Special Feature

Resources

Mondium Chief’s Truman Show moment

Aboriginal business ‘tsunami’

Rio Tinto exclusive interview

News, Profiles, Major Projects List, Opinion and more Autumn 2020 WA WORKS 1

All thethe rightnetworking connections Join for local industry

platform thatâ&#x20AC;&#x2122;s helping Australian business grow If you are looking to connect with mining, construction, infrastructure, defence and other major projects in WA, you need the Industry Capability Network of Western Australia (ICNWA). ICNWA offers access to project information and opportunities and is a FREE service for both Chamber of Commerce and Industry of Western Australia Members and non-members. By using our online platforms, you can register your interest as a supplier for major projects. Projects and procurement teams can use the service to access an extensive supplier base. To find out more about ICNWA, for assistance in listing your project and using our service or registering your business on our platforms, please contact the team today on (08) 9365 7543 or visit cciwa.com/icnwa

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Contents

Cover Story

Autumn 2020

CEO’s Desk Economic outlook Adapting to a world of uncertainty A day in the life – Mary Feild, Chevron On the Ground – Kerman back in iron ore

The North West Shelf JV’s Karratha Gas Plant. Photograph: Woodside.

Sparkling Prospects

Special Feature: Indigenous business goes mainstream A Pilbara Passion – Rio Tinto’s Ivan Vella Tsunami warning – Getting your house in order Engineering engagement – KBSS chief Cory Byers Driving behavioural change – Expo wrap

Opinion Ben Wyatt – Profiting from procurement

Eliza Carbines – ‘Cladding’ won’t save your tender

Louise Thomas – The Rs of energy reform

Ray Loh – Sparkling LNG prospects

Engaging Eliwana – Mallard Deemey Riding the Pilbara’s ups and downs Woodside sees hub benefits Making sense of the APP Energy and equity – Pilbara Solar Rockingham lights the way Renewables projects queuing up The blossoming of mine solar Nickel project gaining traction

It’s your business to register.

Infant Mondium bags big wins

Major Projects List BHP hires more workers Oil plunge spurs LNG delay fears Henderson OPV build sets sail Defence lowdown Digging in Midland on the move Commodity corner A hundred years for R. Moore & Sons

If you employ workers in the construction industry you may be required by law to register in the Construction Industry Long Service Leave Scheme. Find out by visiting www.myleave.wa.gov.au or by calling 08 9476 5400.

Pilbara airport upgrade takes off Tech Talk The echidna

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Welcome

Editor’s Letter Looking beyond COVID-19

s a viral epidemic sweeps through Australia and the world, some might argue it’s off topic to be talking about major projects when many of them might suffer serious setbacks in the next few months, depending on how COVID-19 pans out. Not so! Facilitating major projects will be important to the prospects of WA staging a speedy economic recovery after the unprecedented measures taken by governments to “flatten the curve” of infection rates had decimated several industry sectors, with thousands of people losing their jobs. The extreme actions were part of a delicate balancing act to save lives versus the need to keep key parts of the economy, including essential services such as power supply, ticking over. Thankfully, much of the resources sector, in recognition of its immense importance to the economy and supply of essential commodities such as gas, was still operating, albeit with restrictions on interstate FIFO workers. As for the pipeline of major projects, Santos was forced to defer a final investment decision on its Barossa LNG venture, while Woodside was facing speculation of further delays at its Burrup Hub proposal. Iron ore, meanwhile, was less affected by the crisis as the price of the steel-making commodity remained fairly stable. In fact, it is expected to reach record heights in the current fiscal year ending June 30, 2020, according to the Department of Industry, Science,

Energy and Resources’ March quarterly report. The Federal Government agency said iron ore’s price resilience was leading to a surge in iron ore export revenue, “making it likely that in 2019–20, iron ore will be the first commodity to exceed $100 billion in export earnings over a single year”. Nearly all of Australia’s iron ore is produced in WA. Meanwhile, Australia’s total resources and energy exports were expected to reach $299 billion in 2019–20. Those numbers show why it is important to consider and encourage major projects with a potential to keep industry sectors alive and the supply chain healthy. And let’s not forget the tax revenues and royalties generated by resources producers that help prop up the Federal Government’s massive spending programs on Defence and infrastructure projects. While recognising the world-leading stature of WA mining, no-one argues against the importance of diversifying the economy into new and emerging sectors such as battery chemicals. A sometimes overlooked diversification prospect is the rapidly growing Indigenous business sector. A new generation of Aboriginal entrepreneurs are making big inroads in the Pilbara, while others are preparing for what’s been dubbed a “tsunami” of contract opportunities generated by the State Government’s Metronet projects in Perth. Don’t miss our special Aboriginal business engagement feature starting on page 12, alongside a feast of other informative reading.

Stephen Bell

We hope you enjoy reading WA Works as much as we do producing it. Share your thoughts at editor@cciwa.com

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Published quarterly by Chamber of Commerce and Industry of Western Australia Limited 180 Hay Street East Perth WA 6004 (08) 9365 7555 info@cciwa.com www.cciwa.com President Nicolle Jenkins Chief Executive Officer Chris Rodwell Editor Stephen Bell (08) 9365 7445 editor@cciwa.com Chief Editor Elva Darnell (08) 9365 7437 elva.darnell@cciwa.com Graphic Designer Katie Addison (08) 9365 7518 katie.addison@cciwa.com Advertising 1300 422 492 advertising@cciwa.com

Disclaimer: This information is current at April 2020. CCIWA has taken all reasonable care in preparing this information, however, it is provided as a guide only. You should seek specific advice from a CCIWA adviser before acting. CCIWA does not accept liability for any claim which may arise from any person acting or refraining from acting on this information. The views and opinions expressed are not necessarily the views of CCIWA. Reproduction of any CCIWA material is not permitted without written authorisation from the Editor. © Copyright CCIWA. All rights reserved

CEO’s Desk

Chris Rodwell

WA will work again Governments are playing a vital role in guiding us through these challenging times but it is small and medium businesses that will provide the backbone of WA’s economic recovery

here is an ancient Chinese curse; “may you live in interesting times.” It’s obvious that Australian businesses — and indeed the whole world — are currently living through history as it plays out, day by day. With brawls in our supermarkets, unprecedented global lockdowns and sprawling unemployment queues, these are times we will tell our grandchildren about. Many of the quarrels that once loomed large in Australian life, whether about politics, parenting, sport or personalities, have been rendered very small by the scale of our present challenge. We are being reminded of what businesspeople have known forever and may have taken for granted for these long, peaceful decades; that life is so much better in uninteresting times, of stability and certainty. Our historically unusual era of stability has been the foundation of Australia’s economic growth, during which we have engaged our entrepreneurial drive and pursued trade in our region. So as we battle through this unprecedented year — which the Prime Minister has warned will be the hardest in many Australians’ lives — we must remember that what we face is not a structural issue with our system or our institutions. Some in public life have sought to attribute the bruising economic fallout we now face to a failure of markets. They point to the rising rates of dissatisfaction with democracy and free enterprise among young people, asserting that dirigiste sentiments — meaning ever-greater acceptance of government command of the economy — are here to stay. It is vital that we challenge this. At CCIWA we know that Australians’ wellbeing, quality of life, and society overall, is improved by a prosperous economy. It provides the jobs, the confidence and the certainty that people need to uphold their dreams for career and family. Our economy, our democratic system and the spirit of free enterprise has produced an unprecedented run of growth in this nation, right up to the last quarter. Until these last few weeks, it would be hard to nominate a time in the last ten-thousand-year

stretch of human history, that you’d rather have been born into. In the peace since the end of the Cold War, global poverty has halved and infant and child mortality has more than halved. Since 1950, the average life expectancy across the world has doubled, the rate of adult literacy has doubled and the GDP of free market economies has doubled. In socialist societies, the kind of scarcity we currently face is a daily or weekly occurrence. It’s certainly true that now, even more so than during the Global Financial Crisis, our economies are looking to governments to safeguard businesses against devastation. But even as Australians confront the ever-moving COVID-19 outbreak, we have seen recognition from governments that our small and medium businesses — the backbone of the nation and the heartland of CCIWA membership — are also the key to successfully preserving the economy. Our organisation is always striving to bring about the best conditions for WA businesses,

to make this state the best place to live and do business. Right now, that means ensuring the right support is in place to enable businesses and workers to persevere and flourish again on the other side of this crisis. Many of our members are already accessing the free resource CCIWA has launched, covid19.cciwa.com, to help guide businesses through the response to the coronavirus. And in coming months, it will be within our role to help rebuild many of these businesses. At this time, it’s critical that we do everything we can as a business community and as Australians, to safeguard each other, to offer strength and a helping hand and never to forget our responsibility to show kindness. There will be economic impacts for every Western Australian in coming months, and hard reminders of the value of jobs and a strong economy to our way of life. But our system is the right one. It has given us everything and it is worth fighting to preserve in this moment of vulnerability. Looking to the near future, I’m confident I’ll be contributing to issues of WA Works which detail a WA that is back to work, back on track and striving once again — in predictable, perhaps uninteresting times — towards a return to growth and prosperity.

“At this time, it’s critical that we do everything we can as a business community and as Australians”

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The Big Picture Last year iron ore producer Roy Hill hosted Gail Mabo, daughter of the late Eddie Mabo, during NAIDOC week to create this artwork in collaboration with Roy Hill workers. The artwork imagery was reprinted and used to produce silk ties and scarves, with proceeds from the sale of all products going to the Roy Hill Community Foundation. Roy Hill says its positive relationships with Traditional Owner groups is underpinned by Native Title Agreements with each of the Kariyarra, Nyiyaparli and Palyku people.

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Economic Outlook

Aaron Morey

Recovering from a wild ride It has been buffeted by the reverberations of the COVID-19 outbreak, but there is hope on the horizon for the WA economy in the form of a more positive housing outlook, writes Aaron Morey

o say the past few months have been a wild economic ride would be an understatement. Since CCIWA released its Outlook report in January, the bushfire crisis escalated significantly, and the COVID-19 outbreak spread itself across the world, reverberating across the global economy. The Western Australian economy is not immune from the economic consequences of these events, particularly COVID-19. CCIWA estimates that the fall in visitor expenditure alone will reduce economic output by around $350 million in the first 6 months of the year. On top of that, lost seafood exports will amount to around $90 million. Supply chain disruption is also hurting local businesses, with a range of parts currently unable to be sourced from China. Looking forward, the danger on the horizon is significant falls in consumption if there is a widespread local outbreak. Even prior to these events, the WA economy was hardly firing on all cylinders. The bright spot was of course an expected uptick in mining investment. However, when that expected uptick in investment arrives, it won’t ignite the economy like investment phases of the past. Coming investment will amount to around 20 per cent of the investment surge between 2010-11 and 2012-13. And its important to note that around half of the spending in the pipeline is still subject to Final Investment Decisions. Notably, final investment decisions for significant

projects such as Browse and Scarborough have been pushed back. There is still plenty to be positive about, however. One of the missing pieces in the recovery of the WA economy has been the housing sector — in particular the low levels of dwelling construction and housing turnover.

There are signs however that the market is making inroads into this oversupply. On the one hand, the prolonged period of declining growth in new dwelling construction has allowed some of the existing oversupply to be absorbed. On the other, the rate of population growth in WA is continuing to climb, while the rental vacancy rate has reached new lows and rental prices now

“CCIWA estimates that the fall in visitor expenditure alone will reduce economic output by around $350 million in the first 6 months of the year” The key factor that has held back turnover and construction has been a significant oversupply of housing stock. This oversupply was the result of a perfect storm, whereby the dramatic slowdown in population growth at the end of the mining boom coincided with a peak in new dwelling construction. In 2018 BIS Oxford Economics declared Western Australia’s housing market the most oversupplied of all Australian states. Similarly, the Chair of the Housing Industry Forecasting Group and REIWA president have commented on the level of stock in the market.

appear to be rising. Housing prices also appear to have bottomed. These factors all point toward a need for future dwelling construction, and a likely uptick in housing turnover, which typically generates extra spending on renovations and household furniture. While greater housing activity will aid our economic recovery, ultimately that recovery will depend on whether we can create an environment in which businesses are confident enough to invest in the WA economy. To that end, and based on its consultations with its members, CCIWA is developing a comprehensive policy reform agenda to present to Government as part of its budget deliberations. We look forward to sharing the details of this plan with the business community soon. CCIWA is optimistic that if governments implement its reform proposals, we can build a better WA. Our economy has long shown it can punch above its weight, with its remarkable success being driven by successive generations of Western Australians, armed with an entrepreneurial spirit and appetite for risk. With recent significant investments in hotels and infrastructure, a budget on a more sustainable path, and cuts to payroll tax, there is a strong platform on which we can build. Aaron Morey is CCIWA’s Chief Economist.

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COVID-19

Adapting to a world of uncertainty In troubled times it makes sense to diversify your risks By Sean Cowan and Stephen Bell

ravel restrictions, wild gyrations in markets, uncertainty about the future of some major projects and fears of equipment shortages. Welcome to the world of COVID-19 circa late March 2020, as WA’s supply chain struggled to get a grip on what it all meant for current and future work prospects. At the time of writing, there had been no major WA projects deferred or cancelled, but suppliers of services and equipment to the resources sector were bracing for more bad news. Measures by governments to curtail the spread of the virus were so fast moving, the situation will certainly have changed by the time you read these words. But some aspects of the crisis were providing useful lessons, including the need for local businesses to cushion their risks by diversifying supply chains. For instance, WA-based mining equipment supplier Oreflow Australia used to get all its steel conveyor rollers made in China. But by the time Coronavirus hit, the company was on the verge of a new deal with an Indian manufacturer that would ensure it was buffered from local conditions in the world’s most populous nation.

Good timing The timing couldn’t have been better. Since early February, worldwide supply chains had been seriously affected, with manufacturers around the world hitting delays or being entirely unable to access parts from China. Oreflow Australia National Sales Manager Chris Comley said he had been negotiating with Indian manufacturer Velocity Rollers since October and placed his first order with the company in early March. Comley said he’d started looking for a supplier outside of China when changes to the galvanising industry started to affect supply timelines last year. He was then introduced to Velocity Rollers by CCIWA. “Life must go on,” Comley said. “And business must go on. And that’s why I’ve taken steps to ensure that we can get a continued supply and it doesn’t affect our lead times.” Comley said the family company’s relationship with its Chinese suppliers was as strong as ever, but having suppliers in India ensured the business could always compete on both price and quality. Velocity Rollers Managing Director Nitin Patkulkar said his Pune-based company

already had contracts with companies on the east coast, but was now looking to supply to other WA companies. He hoped to move some of the company’s manufacturing operations to either Perth or Kalgoorlie and expected to employ about 15 local workers. Patkulkar encouraged local WA mining suppliers to look to India to diversify their supply chains.

“Manufacturers around the world hitting delays or being entirely unable to access parts from China” CCIWA’s International Trade and Investment Centre Manager Michael Carter, who is also the WA President of the Australia India Business Council, said India is a well-established world class manufacturing hub of South Asia. He said it was well placed to supply WA mining companies and suppliers with equipment and engineering components. “It makes sound business sense to have diversified market sources to safeguard against supply deficiencies or bottlenecks, adverse global or regional conditions and exchange rate fluctuations,” he said.

Lay of the Land Meanwhile, suppliers of services and equipment

to WA’s resources sector were bracing for COVID-19 impacts. A hint of the trouble on the way came in March when Monadelphous withdrew its guidance from a month earlier forecasting about 10 per cent revenue growth for the 2019-2020 financial year. The Tier One engineering contractor cited a “significant escalation of measures taken by both governments across the world, as well as our customers, to prevent further spread of the virus”. Many WA conferences were deferred because of COVID-19, including the giant APPEA oil and gas gathering, but several CCIWA staff attended the AOG conference, gleaning a few insights: • An engineering supplier that sourced high voltage insulators from China expected issues sourcing alternatives once stocks ran low; • A high-pressure pump supplier bought stock mainly from Europe. With much of Europe going into lockdown, this might cause problems; • A big oil and gas company said some supplies were delayed, but it was more worried that FIFO staff on rigs would be affected by travel restrictions; • A valve supplier said it had stock for 3 months, but if the outbreak restrictions continued for another 6-8 weeks, it would be affected. CCIWA offers a wide range of services for suppliers concerned about the impact of COVID-19 on their business. These include a suite of bespoke trade services through International Trade Consulting, while ICNWA offers practical advice and services for businesses seeking work on major projects.

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On the ground

Barracking for the locals

A day in the life … Mary Feild, Chevron Australia local content manager

’m responsible for the local content team and together we manage Chevron’s Australian industry participation obligations, focusing on local, regional and Aboriginal engagement through our supply chain. We liaise with key stakeholders, including business owners, contractors, business associations and the local communities where we operate. I connect small operators with the right people to make things happen. Advocating for local businesses and enabling them to grow their capacity and capabilities is incredibly rewarding. My experience coming into this role was, in a word, varied! From finance to marketing and business development, I’ve worked in government, the private sector and run my own business. Before joining Chevron in 2010, I was working in the mining sector and living in the Pilbara, which meant I was immersed in the local and Aboriginal communities.

I used to live in Karratha, so was a regular at the airport back then and during our construction period for the Gorgon and Wheatstone LNG projects. Now I’m most often in Onslow when visiting the Pilbara. One of the many benefits of working with local businesses is the unique opportunity to watch them grow, develop, adapt to changing business needs and innovate. There are many inspiring growth stories in our supply chain, but not many as captivating as that of Balladong/Wilmen Noongar family Kim Collard and daughter Sharna Collard. Chevron first partnered with the Collard family more than a decade ago, when Kim was employed to run cultural awareness training for our employees through his business, Kooya Consulting. In the Balladong dialect, Kooya means ‘frog’, and like a frog Kim’s business grew in leaps

“One of the many benefits of working with local businesses is the unique opportunity to watch them grow”

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Chevron Australia local content manager Mary Feild

and bounds. In 2013, the Collard family diversified into their now nation-wide office and stationery supply business, Kulbardi. In 2017 Kulbardi, meaning ‘magpie’, won a tender to supply stationery to Chevron’s offices and have done so ever since. Kim and Sharna established the Bibbulmun community fund where part of Kulbardi’s proceeds are channelled back into the Aboriginal community. They have also set up Kooya Fleet Solutions, Australia’s first and largest Aboriginal-owned and operated fleet management company. Since 2016, KFS has supplied light vehicles to Chevron’s Wheatstone site near Onslow. Engaging with a large corporate can bring significant opportunities but can also be challenging for start-ups and small businesses. At Chevron, we strive to be the global energy company most admired for our people, partnerships and performance. In local content, these three drivers are really personified. Chevron Australia recently launched its first reconciliation action plan, which outlines our commitment to ensuring Aboriginal people fully participate in and benefit from the opportunities created by our industry. The plan outlines 17 key actions, designed in close consultation with Aboriginal employees and community leaders, and representatives from across our business, including the supply chain. From construction through to production, our assets in WA have progressed in close consultation with Aboriginal people, traditional owners and local businesses. Our operations will see Chevron remain a key producer of natural gas in WA for the coming decades. Our focus is ensuring we generate long-term, meaningful benefits for our business partners, communities and workforce, and continuously improve our performance within the local content space. My advice to young Aboriginal people considering a career in energy or resources is, “Just do it!” There are many different pathways into this industry and many exciting, rewarding opportunities — not just in Australia but around the world.

On the ground

PMA wins Pigging role at Pluto

Kerman back in iron ore

erman’s re-entry into the iron ore space is part of a $225 million blitz of new contracts on Rio Tinto and Fortescue projects as the Pilbara mine construction boom clicks into top gear. Family-owned Kerman won a $55m contract from Mondium, the joint venture between Monadelphous and Lycopodium, which is designing and building the key infrastructure for Rio Tinto’s $1.1 billion (US$759m) Western Turner Syncline Phase 2 (WTS2) project. Kerman’s contract comprises a fixed plant workshop complete with amenities and office buildings; a heavy vehicle diesel storage and refueling facility; two remote facility buildings inclusive of offices, ablutions and crib rooms; as well as an ammonium nitrate and emulsion storage facility and explosives compound. Construction started in the second quarter, and will conclude in April 2021, Kerman says. It is the WA contractor’s first new iron ore role in several years after it wound back its heavy exposure following the end of the mining boom, preferring to concentrate on its roots in agriculture and port infrastructure and, more recently, lithium. “We are excited about the opportunity to work with Mondium at the WTS 2 project and looking forward to building a strong and lasting business relationship,” says Kerman’s Managing Director Chris Kerman. “This contract award builds on Kerman’s previous successful project outcomes in the Pilbara region, in particular for Rio Tinto and other major mining companies.” A Kerman spokesperson confirmed that WTS 2 is the company’s only iron ore job at present. “We are trying to limit our exposure to iron ore to a manageable level,” he told WA Works. For the Mondium job, all of the work on site will be done through subcontractors, many of them from the Bunbury region, he says.

“Many we have an existing relationship with, others can go to our website, or email us on kc@kerman.com.au,” he says.

430 new jobs at Primero, NRW contracts Primero and NRW Holdings also enjoyed separate iron ore wins that, combined, are expected to require 430 construction workers. About 230 of these will be at Primero’s new contracts, totalling about $100 million for two major jobs at Fortescue and Rio Tinto. At Fortescue’s Chichester operations, Primero will build the iron ore giant’s wet high intensity magnetic separation (WHIMS) plant at Christmas Creek, a job expected to require 150 workers at peak. The project includes the engineering design, procurement and construction of a ‘wet’ iron ore beneficiation plant that will process and upgrade fines material from the Christmas Creek 2 Ore Processing Facility. Primero says works will start immediately following on from a successful early contractor involvement (ECI) process at the end of last year. At Rio Tinto’s Mesa K project, meanwhile, Primero will build infrastructure, including ammonium nitrate and emulsion mixing and storage facilities, and associated administration and access facilities, as well as electrical design of various scope additions. The works, requiring a workforce of 80 at peak, are scheduled to finish in the third quarter, Primero says. The project is the first award for Primero on Rio’s Robe Valley Sustaining suite of projects, with further award opportunities being pursued with respect to surrounding deposits, it added. NRW, meanwhile, will undertake the bulk earthworks for Fortescue’s Iron Bridge magnetite project south of Port Hedland, with its new contract — expected to run for 45 weeks — valued at about $70m.

Local supplier Project Materials Australia has praised the Industry Capability Network WA in helping it win a package of work from head contractor Bechtel at Woodside’s Pluto 2 LNG expansion project. After meeting key Bechtel people at two CCI-hosted Woodside industry briefings, PMA Managing Director Michael Connelly used the ICN Gateway site (gateway.icn.org.au) to register the company’s interest in bidding for work. At the start of the ICN process, Connelly wasn’t sure how it would pan out for the company, he said. “Meeting with the project locally to understand the process and requirements, then to finally end up with our first award is very satisfying for our Perth head office and is the result of many months work to reach this stage,” he said. “The pleasing thing is that in most cases where we submitted an EOI on ICN we were given an opportunity to demonstrate our capability. “Then in most cases we were invited to participate in the bidding process and from there we have ended up with our first awarded package (the PIG Receiver) and we are still in contention for others. “This is a great result and we are looking forward to working on this project,” Connelly said, adding that PMA was now executing orders on the Pluto pipeline interconnect. Pigging refers to the practice of using devices known as a “Pig” to perform various cleaning, clearing, maintenance, inspection, dimensioning and pipeline testing operations on new and existing pipelines. For existing operational pipelines pigging is normally performed without stopping the flow of the product. The Pig will be inserted into an oversized section of pipeline dubbed a Pig Launcher and then, by diverting the flow and pressure to the back of the Pig, the device will start to move inside the pipeline to perform the desired function, Connelly said. “When Pig reaches the other end of the pipeline, it will be captured in a device called a Pig Receiver. By utilising proper isolation valves and quick opening/closure, operators will be allowed to remove the PIG safely while the pipeline is still in operation,” he said. Connelly said the Pig Receiver is made in Italy by FAI, which PMA exclusively represents for the Pluto 2 project.

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Special Feature

Going mainstream Aboriginal business has gone mainstream, but there is plenty of work ahead to ensure the fast-growing sector is capable — and sustainable, writes Stephen Bell

fter a rapid growth spurt in recent years, there’s no longer any doubt that the Aboriginal business sector will become an increasingly important part of WA’s supply chain this decade. And its no longer a matter of ‘entitlement’ or ‘charity’ for the hundreds of Indigenous businesses working in the economy, be it regional infrastructure and healthcare, iron ore and LNG, or State Government road and rail projects in Perth and the South West. Yes, the nation’s biggest energy and mining firms — and their big contractors — are eager to bring Aboriginal businesses into the fold to illustrate their commitment to local content, and to the communities in which they work. But with some of the more successful firms boasting a track record of more than a decade, it is not a matter of “ticking boxes” to satisfy governments, shareholders and other stakeholders. Some are just the best in class for specific jobs. As Rio Tinto’s head of Rio Tinto’s port, rail and core services Ivan Vella says in our exclusive interview, more and more Aboriginal contractors are winning maintenance and construction work on Pilbara mine infrastructure. Indigenous-owned Baru, for instance, recently won a job at Rio’s upgrade of the stackers and conveyors at its Brockman 2 mine, including a structural upgrade to the stacker rail sleepers and conveyor foundations. “I think if you look at the track record, you just see this step-by-step capability development

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which is a credit to them and I think, great to see them winning such an important piece of work at Brockman,” Vella says. Vella is also passionate about making engagement with the sector more sustainable. He sees a future where many Indigenous businesses have a diversity of customers and growing capability and, ideally, are not just captive to Rio Tinto interests and Rio Tinto requirements. In the oil and gas sector, meanwhile, Woodside’s $50 billion Burrup Hub is another key project on many contractors’ radar, Indigenous or otherwise. But, at the time of writing, the concept of linking the Scarborough and Browse gas fields into an interconnected hub of seven LNG trains on the Burrup Peninsula was looking increasingly risky following the oil price collapse and the COVID-19 ramifications. Whatever the fate of the huge LNG construction projects, however, the surge in LNG and iron ore plant maintenance work was expected to lead to more sustainable opportunities for Indigenous enterprises. Susan Shirtliff, CEO of Ngarliyarndu Bindirri Aboriginal Corporation — the owner of successful Roebourne-based contractor Brida — believes the human capital of the Pilbara has been “transformed” over the past decade as the industry matures. “It’s a different situation that we’re in now than we were five or 10 years ago,” she says. Check out our feature on Karratha engineer KBSS, which has a joint venture with Brida, to show how partnerships, if done properly

and for the right reasons, can benefit both sides of the deal. Meanwhile, the push by Federal and State Governments to build economy-boosting road and railway infrastructure is shaping as a big growth path for the sector. Projects such as the Metronet railcars, the Yanchep and Thornlie-Cockburn rail extensions, the Morley-Ellenbrook railway and the Bunbury Outer Ring road are a $5 billion-plus attraction for Aboriginal contractors. Noongah Chamber of Commerce and Industry Executive Officer Tim Milsom describes the looming government-funded projects as a “tsunami” of wealth-generating opportunities. “We can see that the Aboriginal business sector is going to be a huge part of the WA economy,” he told WA Works. Already, the sector is ramping up in readiness for the tsunami. To illustrate the growth in the sector, about 580 indigenous businesses were registered on the Aboriginal Business Directory of WA in late 2018. At the time of writing it was 722 — a 24 per cent increase over about 18 months. Not all those new entrants will be “tender ready” for the approaching opportunities, so the NCCI is working with both Noongar businesses and State Government agencies to ensure the basics are met in pitching for government contracts. Even outside those huge infrastructure projects, indigenous engagement was establishing a firmer foothold in smaller State Government contracts via the Aboriginal Procurement Policy introduced by Treasurer Ben Wyatt in July 2018. Wyatt described the results from its first year of operations as “spectacular”, but not all elements of the supply chain agree. Our “Making Sense of the APP” feature explains the issues in detail.

Minister’s Memo

Profiting from procurement A new State Government policy is providing Aboriginal businesses more contracting opportunities than ever before, writes Ben Wyatt

he State Government is a major employer, investor, and purchaser of goods and services in Western Australia. Each year, it spends billions of dollars on goods, services and works for the community. The McGowan Government is doing more than any government in history to ensure local businesses receive a bigger share of this work. Since their inception, the WA Jobs Act and WA IndustryLink portal are assisting prospective suppliers of government contracts to tender for work and, as a result, more local jobs and apprenticeships are being created. Local businesses will continue to reap the benefits of the WA Jobs Act. Perhaps a less documented election commitment was our promise to create Western Australia’s first ever Aboriginal Procurement Policy (APP). The policy sets targets to ensure State Government contracts are awarded to Aboriginalowned businesses. It has been in place for over a year now and we are seeing very positive results. The target for the first year of the policy was for agencies to award one per cent of contracts to Aboriginal businesses. I am proud to say that overall, State Government agencies awarded 4.77 per cent of contracts to registered Aboriginal businesses.

This involved awarding 179 contracts with a total value exceeding $167 million — about triple the number of contracts awarded before the policy was introduced. This has resulted in 92 different Aboriginal businesses being engaged, with 99 per cent of them from WA. This directly supports the economic prosperity of Aboriginal people in business and their families in our state.

Ben Wyatt

initiatives to support Aboriginal businesses, such as tendering preferences for bids that include Aboriginal employment. Ten government trading enterprises also chose to follow the policy and focus their efforts towards contracting with Aboriginal businesses. Importantly, reporting on the outcomes of the APP provides transparency. Highlighting those government agencies that have not met the target is done, not so we can condemn them, but so we can better support them to work with Aboriginal businesses. The Department of Finance has reflected on the policy’s implementation and identified methods to improve support for government agencies and Aboriginal businesses to help them benefit from the opportunities presented. The Aboriginal business sector is to be congratulated for embracing the opportunities presented by the policy. The sector encompasses businesses and organisations from a wide range of industries. The sector provides vital community services, advises Government on important projects and programs, as well as, delivering quality products and services in numerous fields. At the last count, there are more than 720 businesses registered on the Aboriginal Business Directory of WA, with that number constantly increasing. As the APP targets increase, WA Government agencies will be required to provide more contracting opportunities to Aboriginal businesses. The McGowan Government’s introduction of the APP is fundamentally resetting the relationship between WA Government and the Aboriginal business sector by giving Aboriginal businesses more opportunity than ever before. There is still more work to be done, but

“State Government agencies awarded 4.77 per cent of contracts to registered Aboriginal businesses” The contracts with Aboriginal businesses are not low value contracts, with all valued over $50,000 and one contract worth $97 million. In fact, more than 40 per cent of the successful contracts were valued above $250,000. Thirty-three Western Australian Government agencies have demonstrated their commitment to engaging Aboriginal businesses by achieving or exceeding the first-year target of one per cent. There are a number of agencies who are building on the policy and developing their own

the policy has already strengthened the relationship and led to exceptional success in its first year of implementation. I look forward to the ongoing and increasing success of this policy as it generates a legacy of prosperity for Western Australian Aboriginal people, helping to improve the lives of generations to come. Ben Wyatt is Treasurer and Minister for Aboriginal Affairs

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A Pilbara

passion In an exclusive interview with WA Works, senior Rio Tinto executive Ivan Vella explains how the mining giant is creating more sustainable opportunities for indigenous businesses in the Pilbara, writes Stephen Bell

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Special Feature

s head of Rio Tinto’s port, rail and core services, Ivan Vella is passionate about improving the lot of Aboriginal contracting businesses. Given that all Rio’s key WA assets are in the Pilbara, with its rich history of more than 30 Aboriginal cultural groups, this is not totally unexpected from a senior executive of a global mining outfit facing increasingly high community expectations on local engagement. What is more surprising, is the seeds of Vella’s zeal were sown nearly 9000 kilometres away in Mongolia during the early to middle years of last decade, where he worked on the Rio-managed Oyu Tolgoi copper project. At that outpost, in the southern Gobi Desert about 80km north of the Chinese-Mongolian border, Vella’s stint of more than three years had a strong focus on local procurement. Nowadays, Rio says about 93 per cent of its employees at the mine are Mongolian and, between 2010 and 2019, the company spent more than $3 billion nationally with Mongolian suppliers. “I learned a lot and I brought a number of those learnings back here to contribute to this (Pilbara) program,” he tells WA Works in an exclusive interview. “I’m both proud of what our team has done already and continuing to challenge them to do more. “My view is that the more we build clusters of capable, powerful local businesses that underpin the resources industry here in WA, ultimately this makes our businesses and our industry more resilient.” “It makes WA a stronger economy in its own right and a reference for mining and resources elsewhere in the world. “So to me, this is such an exciting place to work and something I’m personally very passionate about,” Vella says.

Longer lasting engagement Passion can only take you so far, but Vella’s impression is that WA mining is getting “much better” at including Aboriginal enterprises in their business plans.

He believes this reflects the different tenor of resources construction and maintenance these days, compared to the peak of the mining boom last decade. “Through the boom times there was lots of construction,” he says. “Lots of civil contracts and lots of short-term activity. And I think a tremendous amount of spend was directed towards local businesses and Pilbara Aboriginal businesses.” Rio is now trying to make those opportunities more sustainable, rather than on-off contracts. “It’s more lasting and that means getting Pilbara Aboriginal businesses involved in longterm maintenance contracts, in work that’s closer to our core assets,” he says. “That’s obviously sustainable and gives them a pipeline to build more capability and a longer-term engagement with our business.” For example, Rio has worked for about seven years with Traditional Owner business Yurra, which is majority owned by the Yindjibarndi Aboriginal Corporation. “We’ve worked with them steadily from cleaning and grounds maintenance and some basic civil works around our railway and we’re steadily building that up to more and more complex work,” Vella says.

“An example is culvert repair and refurbishment, which is quite technical. They’re partnering with other players to help them build that capability. And as they build on that it allows them to get more confidence and take on more work across our railway.” Vella also says he recently had a conversation with senior management at Yurra about potentially placing some of the contractor’s team into Rio Tinto’s technology team. “Obviously, Rio Tinto has great credentials in this space with all the automation, technology and digital capability we’re developing. “How do we share some of that and let them (Yurra) build on that, so they can ultimately go and develop it further? “That’s what we’re busy arranging right now, to bring some of their team into our business … so they build their own capability and they can grow that.” Rio has also sought to get indigenous enterprises involved from the ground up at its US$2.6 billion Koodaideri project, which was approved in November 2018. As of late January, Rio had awarded work valued at $69m in nine Koodaideri contracts to Aboriginal businesses. This sum includes a $34m contract with White Springs, which is supplying more than 600,000 tonnes of ballast for the Koodaideri rail line. Other contract awards included Kurtarra (fibre optic cable), Ngurrara (camp earthworks), Yanagu Horizon (bulk earthworks and drainage), iCads (surveying), Karlka Fencewright, Yurala (miscellaneous earthworks) and Lorrex Contracting (access roads). Whether Koodaideri or other mine sites, Vella says Rio wants to see engagements that leave a lasting impact, “ideally not just captive to Rio Tinto interests and Rio Tinto requirements”. “What we want is businesses that have got a diversity of customers and growing capability and they can do more and more across the whole Pilbara region,” he says.

Baru goes big In January, indigenous-owned Baru Group helped Rio Tinto achieve a milestone in its ongoing effort to boost work opportunities for WA businesses. In that month, Rio said it had awarded 100 work packages to Pilbara enterprises as part of a procurement program running since May 2017, with Baru one of the more recent winners. The contractor won a job at Rio’s Brockman 2 iron ore mine — an upgrade of the stackers and conveyors, including earthworks and a structural upgrade to the stacker rail sleepers and conveyor foundations. Vella says Baru started off providing contract labour to smaller projects, gradually building up to bigger and bigger jobs. The Karratha-based outfit are now starting to have a “much bigger presence” in the industry, he says. “They’ve worked across a number of different customers in the Pilbara and have done different projects with stackers. “I think if you look at the track record, you just see this step-by-step capability development which is a credit to them and I think, great to see them winning such an important piece of work at Brockman,” Vella says.

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Special Feature

Tsunami warning Indigenous contractors need to get their house in order to ride the next wave of government infrastructure spending, according to a key Noongar advocacy group, writes Stephen Bell

ndigenous business is already viewed as one of the fastest growing sectors in Australia as a new generation of entrepreneurs takes advantage of a raft of state and federal procurement programs. But for Aboriginal-owned businesses in WA, the fun may be just starting. In fact, the Noongar Chamber of Commerce and Industry (NCCI) describes the looming government-funded transport projects in WA as a “tsunami” of wealth-generating opportunities. “We know it’s coming,” says NCCI Executive Officer Tim Milsom. “We can see that the Aboriginal business sector is going to be a huge part of the WA economy,” he told WA Works. Land agreements, such as the $1.3 billion South West Native Title Settlement, huge

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infrastructure projects like Metronet and the Bunbury Outer Ring Road, and new procurement policies are opening a wealth of new work prospects for the sector. Deloitte, the global accountancy and professional services giant, estimates there was a 30 per cent increase in the number of Australian indigenous businesses from 2011 to 2016. This compared to just a 1 per cent increase in non-indigenous businesses. Milsom believes the expansion has continued since then, assisted by the Federal Government’s $90 million Indigenous Entrepreneurs Fund announced in 2016 and the 2018 launch of the WA Government’s Aboriginal Procurement Policy (APP). The APP requires State-owned agencies to

award a minimum of one per cent of contracts to registered Aboriginal businesses in year one, increasing by a further one per cent annually until it reaches three per cent in 2020-21.

Business registrations boom To illustrate WA’s growth in the sector, about 580 indigenous businesses were registered on the Aboriginal Business Directory of WA in late 2018. At the time of writing it was 722 — a 24 per cent increase over about 18 months. “We already know that government has committed to spend billions of dollars with Aboriginal business in the next 10 to 15 years and we’re trying to get every sector ready to take advantage of that,” Milsom said. From a South West perspective, the government prospects in store are certainly tsunami-like — in a good way. They include: • The $1.25b Metronet railcars manufacturing project, due to kick off next year in Bellevue; • The combined Yanchep rail extension (now underway) and Thornlie Cockburn Link

Special Feature

Artist’s impression of the Bellevue railcars assembly facility

project, also worth $1.25b; • The $1 billion Morley-Ellenbrook railway line due to start construction next year; • $852 million Bunbury Outer Ring Road, likely to begin early works early in 2021; • More than $1b for Tokin Highway-related projects; • $175m on the Albany ring road; and • $160m forecast spending on the new Midland railway station.

that go into an Aboriginal business and conduct a “health check” based on pre-qualification requirements for large contracts, he says. This might include big agencies such as Main Roads and the PTA, and large contractors for the likes of Chevron and Shell, who have “nonnegotiable requirements” to be able to tender for those types of packages, Milsom says. “We go in, ask a number of questions, understanding where the skills gaps are.

“We can see that the Aboriginal business sector is going to be a huge part of the WA economy” With this $5b-plus spending spree on the way, inexperienced businesses must ensure they are watertight and ready to ride the wave, Milsom says. NCCI is working with both Noongar businesses and State Government agencies to ensure the basics are met in pitching for government contracts. Its new BOYA business solution is being delivered by Aboriginal mentors and consultants

“We also act as a conduit between the Aboriginal business and the government to broker the non-negotiables that are expected in pre-qualifying for tenders, and into pricing and competitiveness. “So, the Chamber’s role is to encourage Aboriginal business, and to help it actually understand how it would be competitive and sustainable,” he says. Milsom said the NCCI, which launched in 2018

out of a room in CCIWA’s East Perth office, has also been fortunate enough to be given a building in Subiaco that acts as a business hub. “We’ve turned that into a low-cost space for Aboriginal businesses to work from, but also bringing in mainstream, State and Federallyfunded departments that have solutions for Aboriginal enterprises,” he says. “In this hub, we’ll work as a centre where an Aboriginal business can come in and sit down with culturally-respected business leaders that are chosen by the community to represent Aboriginal people in business. And we will find solutions for them.”

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Special Feature

Engineering engagement A young Karratha business is setting a high bar for indigenous engagement in its home town including the creation of a joint venture space to pursue maintenance contracts

By Stephen Bell

BSS Engineering has been busy in its eight years of existence, and not only in terms of providing mechanical services to mining and oil and gas clients. A strong commitment to community involvement has seen the company incorporate two stand-alone indigenous partnerships that are eager to participate in the Pilbara’s economic rebound. Much of the impetus for the pro-active engagement with local Aboriginal businesses stems from Managing Director Corey Byers, a mechanical engineer who founded KBSS in 2012 with a few mates to get work on what was meant to be a short-lived Rio Tinto project. “We started with six guys, it was only meant to be two months — just some young guys having a go,” he recalled in his acceptance speech for KBSS’s gong for best WA start-up at Telstra’s 2015 Business Awards. “Twelve months later we ended up having a hundred guys out on site, which still grew.” Ironically, by the time of the award, KBSS had — like many of its peers — started feeling the pinch from the winding down of the boom. Fast forward to 2020 and another boom is dawning as the big iron ore miners replace their production with new mines, while Woodside prepares to launch two big LNG construction projects, Pluto Train 2 and Browse, worth a combined $45 billion. KBSS is angling for some of this work

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and hopes to drag its Karratha and Onslow communities — including joint ventures with recruitment company Globe Hill and facilities maintenance specialist Brida — along for the ride. “We take pride in where we live and strive to continually improve and support our community,” he tells WA Works. “This includes working with local indigenous businesses and providing pathways of opportunity for local members of the surrounding communities.”

Word of mouth and Wheatstone The Globe Hill partnership, GHKJV, is centred on Onslow. It started in 2014 after both parties came together through word-of-mouth and decided to form a JV to pursue opportunities at Chevron’s Wheatstone LNG construction project.

“This led to us having 280-plus personnel on site and included 15 indigenous apprentices during the project,” Byers recalls. “The success of GHKJV on Wheatstone resulted in the business being awarded an operational maintenance services contract for four years with Chevron Australia. “We are only now starting to see the opportunities for this start to flow through.” Meanwhile, KBSS had established a relationship over six years with Aboriginal-owned Brida, which has a core business in facilities maintenance and cleaning services. “This building of trust and understanding led to us creating KBSS-Brida as a fully incorporated business in 2019 with the aim of securing maintenance services contracts in the Pilbara,” Byers says. “While KBSS-Brida have yet to be formally awarded any direct work we are actively pursuing same and have recently submitted an expression of interest to provide Rio Tinto Iron Ore and Woodside with local fabrication support services in the region.” Moreover, the new JV company has also secured a vendor number with Woodside’s Karratha Gas Plant operations and hopes to capitalise on this over the coming months, Byers says. No surprisingly, KBSS’s employment of local workers has fluctuated alongside the boom-bust fortunes of the Pilbara. “We have in the past had over 20 per cent indigenous employment, which was during the

Special Feature

The view from Brida

construction phase of Wheatstone LNG, but that weighting has now changed,” he says. “Currently we have six apprentices engaged via KBSS-Brida and they are working both in our Karratha workshop and also gaining on-site experience.”

No token gestures Despite these successes, Byers is at pains to point out the JVs were not established as part of clever business tactic. “We don’t see getting involved with indigenous partnerships as a strategic undertaking,” he says.

“Such targets were hard to achieve as we didn’t have a big enough indigenous workforce and of course there were better opportunities for many working with the big mine and gas plant operators in the region. “Nowadays it seems to be more about the engagement of indigenous businesses and ensuring those businesses are legitimate in their structure and their governance which is a good thing to see. “As for opportunities, I think that if the expectations are realistic, the commitment is genuine and the benefits are mutual then

“This led to us having 280-plus personnel on site and included 15 indigenous apprentices” “We made the decision to do this properly and not make token gestures of engagement, so we formed standalone separate entities that are majority owned by the relevant indigenous businesses where we share the cost of business and the associated profits equally.” Byers is now in a good position to reflect on the changes, mostly for the better, to Aboriginal engagement since KBSS was formed. “Seven years ago, it was all about companies hitting quota targets for indigenous employment,” he says.

opportunities do exist across the sector.” What advice would he give service companies looking to step up their indigenous engagement? “From my own experiences I would say that, you do this because you want to do it, not because you need to. “You go into this with mutual respect, mutual trust and a sincere commitment to not only build the business, but also to bring about generational change by creating opportunities now and in the future.”

Susan Shirtliff, CEO of Ngarliyarndu Bindirri Aboriginal Corporation — the owner of Roebourne-based Brida — discussed the group’s relationship with KBSS at the recent Pilbara 2019 Summit in Perth. Asked what had made the partnership sustainable, Shirtliff said there had been an “authentic dedication to the people of the Pilbara” on behalf of both parties. That alignment had existed in all of the company’s conversations with other business partners and “definitely with KBSS-Bridda,” she said. Shirtliff stressed that the relationship had not developed overnight. “The respect was developed and not necessarily by me …. I work for a very respected group of elders that are savvy in business and who are very wily about who they do business with. “There is a long period of time and a lot of face time is required to build that trust,” she said. The board of Brida, which is 100 per cent Aboriginal-owned, includes senior Ngarluma elder and Chairman David Walker, alongside senior Banyjima elder Alec Tucker as a director. Brida serves a range of customers, including foundation partner Rio Tinto. Other clients include Woodside, Sodexo, City of Karratha and the Department of Education. “Our client base has grown, not because of our entitlement, but because of excellence in service and the delivery of a very solid product that has reliability,” Shirtliff said. “There is not a lot of margin in grounds and cleaning, but we do harvest that profit and invest all of that in the community of Roebourne,” she said. “And we deliver our own services to bring our human capital into the economy.” At the time of the conference, Brida had nearly 160 people employed, she said. Ngarliyarndu Bindirri also owns and runs the Red Dirt Driving Academy. “The human capital of the Pilbara, I think has been transformed,” she said. “The maturation of Aboriginal businesses and their ability to engage at the highest levels to provide innovation that stabilises, not only the workforce, but its purpose and engagement with all our employees, is a different situation that we’re in now than we were in five or 10 years ago.”

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Special Feature

Driving behavioural change The State Government believes its new policy to boost Indigenous business engagement is on the right path, writes Stephen Bell

reasurer Ben Wyatt’s crusade to increase indigenous contracting opportunities was on full show last month at the Aboriginal Business Expo in Perth that attracted representatives from about 40 State Government agencies and trading enterprises. Wyatt, who also holds the Aboriginal Affairs portfolio, was the headline act. He acknowledged there was “more work to do” for some State Government agencies in meeting the targets of the new Aboriginal Participation Policy (APP). But WA now had a Government and a public service that understood the need to “entrench this for the longer term to get behavioural change”, he told the audience. “Then, as a result, the thing I really want to see (is) joint ventures and partnerships,” he said, adding that he also envisaged small and medium enterprises eventually becoming “large-sized businesses”. Communities, Education and WA Country Health were the three State Government agencies that had done the best so far, both in terms of value and the numbers of contracts, “and I expect other agencies will be learning from them”, he said. Wyatt already had noticed changes in how some departments issued contracts. “You’ve had agencies from government

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that may historically go out and bundle up contracts, making it very hard for those smaller organisations to pitch for that work — they are being a bit more creative in how they might unbundle that and provide a more competitive environment.”

partnerships for enabling skills development.” Walley also praised the use of broad “framework” agreements with the likes of Metronet, Development WA, the Department of Communities. “If you get a framework ingrained into your core business and operations, it makes it so much easier to shape something that is outside your scope and try to fit it into the scope. “It is a matter of infusing, rather than reconstructing.” Walley emphasised the importance of indigenous labour in building the state’s economy over the decades. “Aboriginal people have been in business a long time, but not necessarily paid for it,” he said. “There was also legislation, that was part of the governments of the day, that excluded Aboriginal people from the capacity to engage in business.” Therefore, the State Government’s new APP legislation was not coming from a “look after the poor blackfellas” stance. “This is saying, ‘You have been left out of the economy by legislation, by practice, by prejudice, by lots of things for a long time, now we want to balance the ledger.”

“Not just cleaning and security” Tim McKimmie, acting executive director of WA Country Health Service (WACHS), said hiring Aboriginal contractors was not just about the provision of typical cleaning and security services. “Some of the contracts we have with Aboriginal businesses are the best that we have, in terms of not just providing value for money, but for really great services — a whole range of different requirements for our business,” he said. “We have an Aboriginal business who provides

“The thing I really want to see is joint ventures and partnerships” He thanked the agencies and trading enterprises that attended the expo — run by the Department of Finance — and for work they’d done in ensuring an “adequate” flow of contracts to Aboriginal businesses.

Flowing down the supply chain Musician, writer and businessman Richard Walley said the opportunities for Aboriginal suppliers was not restricted to State Government agencies, with most big contractors now obligated to set out their Aboriginal engagement strategy. “So there are opportunities that are going to flow down, not only from the Departments, but to those contractors and subcontractors,” he said. “It also gives us capacity to engage in

a very complex renal dialysis and support service across the Kimberley with a value that is approaching $100 million,” he said, in reference to the $97m contract WACHS awarded last year to Kimberley Renal Services. “So this is not just cleaning and security — indigenous businesses provide complex contracts and they are increasingly sophisticated in the way they able to manage their business and run their operations. “A key for me is that engaging with these organisations is going to give you a really good outcome for your organisation. “And it can be a really culturally appropriate and good at supporting the local community in which we are providing services.”

Special Feature

Engaging Eliwana Fortescue turned the first sods at its Eliwana venture in July 2019 and the $2 billion (US$1.275b) mine is scheduled to produce its first ore later this year

A Works’ exclusive Q&A with Robby Mallard and Donna Meyer, directors and joint owners of Aboriginal-owned construction services business Mallard Deemey, shines a light on Fortescue’s indigenous engagement at the project.

What is your background and how did you come to be working at Eliwana? Robby: I’m Managing Director of Mallard Contracting and a qualified plumber and gas fitter, while Donna has played a key role with the Puutu Kunti Kurrama and Pinikura (PKKP) Native Title group serving as a director and committee member for many years. With Fortescue’s support, Mallard Deemey was engaged as a subcontractor to ATCO to deconstruct the Wheatstone camp in Onslow ahead of its relocation to Eliwana. After the job was successfully completed on time, on budget and with no injuries, Mallard Deemey won a contract to work at Eliwana in its own right.

What is your role and what does a normal day involve? Robby: I’m focussed on ensuring that systems and processes are being followed at head office and on site. Donna: I play a key role in engaging PKKP people who are looking for work and ensuring that they can be employed through the business. Over 40 per cent of the workforce who worked on the Onslow project were Aboriginal employees.

Mallard Deemey directors and joint owners Robby Mallard and Donna Meyer

critical part of the company’s vision. Fortescue has also provided payment terms that have enabled Mallard Deemey to undertake larger scopes of work without needing to take out expensive overdraft finance. This contract demonstrates that Aboriginal businesses are capable. It also challenges assumptions that they can only work in ‘operations’ where time schedules are less stringent.

How many of your staff work at Eliwana? Are they mostly drawn from one community? Donna: A significant number of the 45 people working on this contract will come from Carnarvon along with PKKP members sourced from a variety of places around the Pilbara and Perth.

How would you rate Fortescue’s efforts to engage with indigenous people looking to work on Eliwana? Donna: Our engagement with Fortescue has been positive from the outset with a collaborative approach to managing any challenges that have arisen. It has been easy to communicate with key people at Fortescue and we feel that we have a mature contractor client relationship after a fairly short time.

What advice would you offer to Aboriginal people considering a career in working on mine sites such as Eliwana? Donna: Make sure you prepare yourself by developing your skills set and take the opportunity when it is presented. Once you are employed, continue to grow and deliver as an employee — persist and never give up. Robby: Aboriginal people going into business should look, learn and listen. There are going to be hurdles every day with lots of ups and downs — you need to be strong mentally, physically and take advantage of family and friends that will support you. There will be a lot of time away and you need family and friends to understand this. Most importantly, you are only as good as your team. Surround yourself with positive people that are there for you, that provide constructive advice — both positive and negative. And make sure it’s you that makes the decisions about your business — you need to own your business and know it inside and out. This may mean going back to school to complete courses to improve your own skills. You need to be true to yourself — if you can’t do it, speak up and someone will step in and help. There is light at the end of the tunnel, but you have got to know yourself and be clear about why you are doing this.

What is the best thing about working with Fortescue? Robby: The awarding of a $4 million contract for the construction of the new laboratory building at Eliwana is a prime example of Mallard Deemey’s capabilities. The design stage has commenced with construction scheduled to begin in April and then run through until late September. It has enabled our business to commit to engaging Aboriginal apprentices, who will shortly commence at Eliwana. This is a

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Special Feature

Riding the Pilbara’s ups and downs Resources companies need to ensure more revenue from indigenous business joint venture goes to local communities, says a prominent Aboriginal lawyer By Stephen Bell

he mining industry has lifted its game in dealing with Pilbara aboriginal businesses but needs to help small to medium enterprises ride the “peaks and troughs” of the commodity cycle, says an experienced entrepreneur and business owner. Steven Dhu, an Aboriginal lawyer and founding director of Aboriginal United Services, told the Pilbara 2019 Summit that the resources giants had made a huge impact on doing business in regional WA. “When you look at the mining boom we had 10 years ago now, and it could be argued that we’re currently going through it again, there’s a peaks and troughs sort of situation built around how they (mining companies) conduct business,” Dhu said. “And anybody that does business in the Pilbara whether it be white, black, brown or brindle, you go to ride the crest of that business wave with it. “What that means to SMEs is that, when you are trying to maintain a workforce, your salaries and accommodation and those types of overheads have to capture something that is quite relatively in the market. “But at the end of the day, the likes of BHP or Rio Tinto, if they are going to give a higher salary package that has all the benefits, you’re not going to be able to retain staff,” he said.

companies now offering local buying programs for new projects. But part of their good corporate citizen responsibility was to “deal with the peaks and troughs”, he said. There also needed to be some thought given to how much investment was making its way back into communities. “Local business owners like myself, we

“I challenge the industry to think about how they go about their tendering processes when they’re engaging with Aboriginal players” Dhu, born and educated in Port Hedland before studying law at the University of Western Australia, was speaking on the Pilbara 2019 conference indigenous engagement panel. He said the mining industry had gone a long way since the boom with the biggest

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will do our best to invest in local community where we can, but that’s not always achievable because there is a cost price to do business in the Pilbara,” he said. Asked by the panel moderator if he was suggesting the landscape had evolved to

a point where big corporations needed to commit to return more to communities, Dhu said he was thinking more about “strategic partnerships”. There had been a propensity in the Pilbara, when mining companies dealt with Aboriginal or local engagement, to talk about installing “black cladding” — an Aboriginal contracting face — for their projects, he said. “The miner will say, ‘You need to deal with our tier one (contractor)’, or if there’s a specific contract available, they will make a marriage … of convenience,” he said. “It’s only finite because it’s only defined for a certain project, a certain timeline,” he said. “There isn’t any definition of what that means by social outcomes and also how that financial gain goes back into the community.” More work in the space was needed. “I challenge the industry to think about how they go about their tendering processes when they’re engaging with Aboriginal players, joint ventures as they are called … a strenuous test to see where they intend to take that.”

Special Feature

Woodside Manager Indigenous Affairs Sharon Reynolds, Murujuga Aboriginal Corporation CEO Peter Jeffries and Woodside Senior Vice President North West Shelf (NWS) and Burrup Niall Myles

Woodside sees hub benefits The Burrup LNG hub will generate a significant jobs dividend for local communities the energy giant believes By Stephen Bell

senior Woodside executive says the energy giant is striving to ensure Pilbara indigenous people and businesses get access to job opportunities on the upcoming Burrup Hub construction projects. “We particularly want to ensure that our local indigenous communities benefit from the opportunities for training, employment and business participation, supported by the Burrup Hub,” said Niall Myles, Woodside’s senior vice president North West Shelf and Burrup. Woodside also recognised the “incredible” cultural heritage values of the Burrup Peninsula, he said in a speech to the recent Pilbara 2019 conference in Perth. “We’ll continue to work closely with the traditional owners to ensure that industry and rock art continue to co-exist. “Through our contractors, we’ve been working to ensure there are opportunities for the local traditional owner communities and indigenous businesses more generally. “For example, one of our head contractors, Sodexo, has been working to build a wide range of opportunities in the facilities management space. “Right now, 21 local indigenous businesses, including Brida, Naanda, Yurra, Refap and Majun are on-boarded to supply services,” Myles said. These included trades labour, grounds maintenance, mail services, cleaning labour, security services, fleet maintenance and waste management. “These partnerships and local contracts, however small they are, are going to be an essential part of our ongoing and future operations,” he said. Last year consultant ACIL Allen forecast that the combined Burrup Hub LNG projects — Scarborough to Pluto, Browse to North

West Shelf, NWS Karratha Gas Plant (KGP) life extension and the Pluto to KGP interconnector — will inject $1.3 billion of direct expenditure into Karratha and Broome over the life of the project until the mid-2060s. Businesses in Karratha should expect to see about $86 million of direct local spending each year to operate the projects, it said. Woodside is due to make a final investment decision on the $16 billion Scarborough to Pluto project later this year. The company plans to spend about $52 billion on the Burrup Hub, including the Browse and Scarborough LNG projects, between 2019 and 2063.

Meanwhile, Woodside recently signed new agreements with the Ngarluma Yindjibarndi Foundation Limited (NYFL), and the Murujuga Aboriginal Corporation (MAC), building on long-term partnerships with the two organisations and the communities they represent. “We are pleased to extend and expand our community, cultural, heritage and economic participation arrangements with NYFL and MAC in line with our plans to continue the NWS and Pluto operations for decades to come,” Myles said after the signing. “Woodside has operated on the Burrup for 35 years, and these agreements demonstrate our ongoing commitment to the successful co-existence of heritage and industry and support for long-term, positive outcomes for Aboriginal communities.”

“Businesses in Karratha should expect to see about $86 million of direct local spending each year”

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Making sense of the APP Aboriginal businesses are securing more State Government contracts under the new Aboriginal Procurement Policy (APP), but parts of industry believe it is compromising their ability to bid for and win work, writes Stephen Bell

he WA Government has hailed a new policy to increase the number of contracts awarded to Aboriginal businesses as a success, based on its first full year of its implementation. The APP — a McGowan Government election commitment — was introduced in July 2018. It requires State Government agencies to award a minimum of one per cent of contracts above $50,000 in value to registered Aboriginal businesses in year one, increasing by a further one per cent annually, reaching a peak of three per cent in 2020-21.

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In the 2019 financial year, a total of 179 contracts were awarded to 92 Aboriginal businesses, representing 4.77 per cent of all contracts let — well ahead of the target. These contracts had a total value of more than $167 million, according to the Department of Finance, which administers the policy. Treasurer and Aboriginal Affairs Minister Ben Wyatt described the results as “spectacular”. Aboriginal-owned businesses were now in the box seat” to secure the supply of goods and services to the State Government, he said at the recent Aboriginal Business Expo 2020.

“The first year of the policy achieved spectacular results and I’m confident that future targets will continue to be eclipsed,” he said.

First half results Yet the latest APP statistic doesn’t indicate any radical increase in government money flowing to Aboriginal business. In the six months to December 31, 2019, State Government entities awarded “more than $80m in contracts” to Aboriginal businesses, Wyatt said. “As confidence builds, what I’m desperately hoping to see from you (government agencies) is the confidence to take on Aboriginal people,” he said. The policy wasn’t about issuing “charity contracts” to Aboriginal businesses or getting a “less than adequate” commercial outcome for the government. Rather, it was about “putting the bite on” the government and its many agencies to understand the depth and breadth of Aboriginal businesses now available to bid competitively for government works, he said. But the statistics show there is plenty more work to be done. In year one, 36 government agencies did not achieve the policy target, Finance said in its First Year Performance Report for the policy. For agencies with specialised requirements, or those awarding less than 10 contracts in a

Special Feature

year, it might be “challenging to meet the policy targets” irrespective of their willingness to embrace them, it said. This was due to these agencies having either limited opportunities to engage Aboriginal businesses or because they contract for goods or services that Aboriginal businesses currently don’t provide. Prior to its introduction, State Government agencies awarded in the range of 50-65 contracts to Aboriginal businesses per annum across 8-14 agencies, roughly equivalent to one to two per cent of total contracts awarded, Finance said. “Policy has clearly driven the desired behavioural change with the number of contracts almost tripling to 179 contracts across 33 government agencies,” it said.

However, tender processes are primarily determined by who can quote the lowest price to build a project. This can mean the lowest cost bidder — one who might not team up with Aboriginal businesses — wins. Some contractors have also found it difficult to identify how much it should invest in teaming with Aboriginal partners. This affects competing for and winning work. Wyatt said he was open to “tweaking” the policy after getting feedback from delegates on some of its weaknesses at the business expo. The Noongah Chamber of Commerce and Industry (NCCI) said it is pleasing to have a working policy in place. “At last we are starting to record the spend from government to Aboriginal business, so that we can actually get an understanding of how we can grow that sector,” said NCCI Executive Officer Tim Milsom. Nevertheless, Milsom told WA Works the NCCI was challenging the relevance of some of the statistics generated in terms of community services and health. “They seem to have been funded for many years, but they’re included in the figures for the procurement spend,” he said. “I would challenge government that maybe the policy, in its intent was to encourage Aboriginal people to get into business for profit — to make a difference to their communities and have a social impact on Aboriginal wealth and wellbeing,” Milsom said.

Digging Deeper The statistics for the first year of APP don’t look quite as convincing once you dig deeper into the headline number of $167m worth of contracts awarded. This total was inflated by a WA Country Health Service contract of $97m awarded to Kimberley Renal Services. Finance considered this an “outlier” that had significantly increased the total

value of contracts with Aboriginal businesses. All the other significant awards were valued at about $10 million or less, Finance data revealed. Another deficiency of the APP is its exclusion of contract awards not published on the Tenders WA website. According to Finance, this is because information not published on the website (run by the State Government) “compromises” the public transparency and accountability of procurement decision-making as the Department is unable to verify the accuracy of that information. This limitation particularly affects Government Trading Enterprises (GTEs), as most don’t use Tenders WA. As such, Finance requested that each GTE submit contract award information following validation of the data by their own internal auditor. Of the nine GTEs that agreed to apply the policy, eight returned contract award information, with four of those meeting the Year One target. Kimberley Ports Authority achieved a 6.7 per cent ratio, but this was based on one contract awarded out of 15. More realistically, the best GTE achiever was Western Power, which handed out eight jobs to Aboriginal businesses out of 177 — a ratio of 4.5 per cent. To be counted towards the achievement of the targets, a business must be registered on a directory — such as the CCI-managed Aboriginal Business Directory WA — that requires a minimum of 50 per cent ownership by an Aboriginal interest. Further gains by the Aboriginal business sector are expected as the APP targets increase and government agencies provide new contracting opportunities, according to the State Government. Perhaps the best way to view the APP is a work in progress.

Teething pain Nevertheless, WA Works understands there have been significant teething problems with big (non-Aboriginal) contractors competing for and winning work during tenders. For construction work, it has proved costly for contractors to prequalify and meet the Aboriginal engagement criteria without compromising their bids. For instance, a business might team up with an Aboriginal enterprise respond to a tender and put forward a package to satisfy the APP targets.

Autumn 2020 WA WORKS 25

Special Feature a number of project opportunities that we are pursuing,” he said. However, there were significant barriers, including the Proscribed Bodies Corporate, (PBCs), the corporations which manage and protect the rights of native title holders. “PBCs are at various levels of development and experience and are not necessarily run independently by the communities,” James said. “Unfortunately that’s a major barrier, because in order to achieve, for example, equity in a significant project, you do need enough governance to be able to sign contracts with a body that is going to be suitable probity for the life of the project.”

Offsetting Diesel

Energy and equity More renewable power deals could lead to better outcomes for WA indigenous businesses and landowners, writes Stephen Bell

he rise of solar as an increasingly viable option for electricity generation in the Pilbara could create new business opportunities for traditional landowners, says a leading clean energy consultant and entrepreneur. Geoff James, founder and director of Pilbara Solar, believes the young start-up company could be at the vanguard of moves to establish solar PV facilities in partnership with traditional owners (TOs) and remote communities. He said there were still “significant inequalities and disadvantage” for Aboriginal communities both in the Pilbara and the rest of Australia. “Yet most of the Pilbara is now covered by, in many cases, quite strong Native Title claims,” he told the Pilbara 2019 summit. “So, there is certainly an opportunity there to work out something — to do a deal, essentially.” Established in 2017, Pilbara Solar is part-owned by Yamatji Marlpa Aboriginal Corporation, the representative body for more than one million square kilometres of WA. The company aims to provide power to the mining industry, government and business in long-term fixed-price agreements.

Getting in at the ground floor “To my knowledge, traditional owners haven’t received equity share in the mining sector, so we started from the idea that this is an option or opportunity for TOs to get in at the ground

26 WA WORKS Autumn 2020

floor of a new industry and build up a level of ownership,” he said. And solar energy was a “light touch” on the land compared with other heavy industries, such as mining. “On the other hand, it has great visual impact and let’s not be coy about the amount of land that would be occupied if some visionary projects went ahead,” he said, referring to the concept of installing vast solar arrays to pipe electricity to offshore markets. In 2017, James co-authored a prefeasibility study, funded by the Pilbara Development Commission, to export solar power to grids in Asia via a subsea high voltage direct current interconnector. “The ideas of that report led to some findings, notably that there isn’t yet a solar industry of any scale in the Pilbara,” he said. “So we applied ourselves to the task of trying to start that up. “And it seemed to us from a very early stage that a large part of the Pilbara, in fact nearly all of it, is subject to Native Title claims. “And there has been limited participation in the mainstream economy by the traditional owners. It just seemed clear to us that we should look at solar energy and look at it in partnership with traditional owners.” The company’s corporate partners now include remote power contractor CPS National and microgrid specialist Enernet Global. “It has been a valuable journey and we have

James, who is also a research principal for the Institute for Sustainable Futures in New South Wales, said there was “very high value” in offsetting diesel generation with renewable power. “It’s reaching the point where you could make a valid choice between gas infrastructure and a solar microgrid or even a solar storage system depending on the scale and the nature of the load,” he said. “There are lots of opportunities in the Pilbara. You have 1.5 gigawatts of industrial load, probably more by now. That’s a massive opportunity. A lot of that is off the grid. And a lot of it would be very amenable to solar supply and some forward-thinking Western companies have already started investing that way,” he said, in a reference to Alinta Energy’s recent $200 million deal to provide daytime power to Fortescue’s Chichester mines using solar arrays and a backup battery in Port Hedland. Pilbara Solar’s goal would be to maximize the indigenous equity in that style of project, “prove up our model, and in doing so, satisfy many of the off takers’ Corporate Social Responsibility (CSR) goals”. “It’s quite common to have a requirement (for mining companies) to include indigenous programs and employment. What about buying power from and indigenous-owned power station? That’s actually a very worthwhile statement and step about your position on CSR,” James said.

Memo from the consultant

Eliza Carbines

‘Cladding’ won’t save your tender Suppliers need to get serious about their indigenous engagement rather than simply ticking the right boxes on tender documents, says Eliza Carbines

ndigenous engagement has been, particularly in the past decade, on the rise as a critical area of focus for procurement teams across our state. These teams have begun to recognise the importance of establishing a diverse supply chain and have done so (or are still starting to do) with varying degrees of success. Typically, business-to-business engagement over a certain dollar amount in Western Australia is negotiated after a competitive tender process. These tenders at a minimum usually require the tenderer to disclose whether they are in-part or fully owned by Aboriginal and Torres Straight Islander (ATSI) people or organisations. In the past five years there has been a rise in the amount of detail required beyond this simple disclosure. Information such as how the tenderer contributes to the development of ATSI people or businesses, how diverse their own internal supply-chain is, HR practices — including attraction and retention and cultural awareness — are all common items requiring comment within a tender proposal. This level of detail has been established after a trend was discovered, commonly referred to as ‘cladding’, whereby non-indigenous businesses were commercially partnering with indigenous businesses in order to suggest a legitimate connection or alliance with the ATSI community. Beyond a financial benefit for the indigenous business, there was little proof in many cases that there was any substance to these partnerships, leaving the indigenous businesses no better off in terms of skills, experience or job opportunities. This is of course not indicative of how all indigenous businesses were treated, but it became an undeniable trend nonetheless. Similar in many ways to disclosures and responsibilities regarding the environment and environmental impact, indigenous engagement is much more effective when it is, well, effective. Procurement teams are becoming better at deciphering tender response wordsmithing and getting to the crux of the matter — is there real indigenous engagement occurring? Impartial data on this is notoriously difficult to collect. Most tenderers are not likely to voluntarily disclose if their indigenous engagement policy is disingenuous. Furthermore, many procurement teams do not openly discuss the reasons they

did or didn’t engage a particular contractor, usually stating commercial-in-confidence clauses and privacy. What can be said with certainty is that compliant tenders are always positioned for success more strongly than non-compliant tenders. So how can organisations ensure they are truly compliant and not simply ‘box-ticking’ their way through tender responses?

“Indigenous engagement is much more effective when it is, well, effective” There are a number of methods for indigenous engagement which have proven effective, some of which are outlined below. While this is not intended to be an exhaustive list, it does act as a starting point for tenderers who wish to strengthen their Indigenous engagement. 1. Improve your supply chain: Connect with organisations such as privately run Supply Nation (supplynation.org.au) and government

run ABDWA (abdwa.com.au) who offer a pre-qualified database of indigenous organisations ready to sub-contract, partner or supply. 2. Strengthen your HR behaviour and internal culture: Implement regular cultural awareness training, relevant and updated policies and procedures, specific Indigenous engagement plans and targeted recruitment practices. 3. Understand the traditional owners in your area: Who are the traditional owners in the area your business operates? Connect with them, understand their goals, visions and pain-points. Try to find synergies between your organisation and theirs, then develop a mutually beneficial action plan. As with all matters, this is a multifaceted conversation. Certainly, the responsibility of sustainable growth for indigenous businesses does not sit solely on the shoulders of nonindigenous organisations tendering for work across WA. Procurement teams and indigenous organisations themselves must also take responsible and reasonable steps to ensure meaningful change. Happy bidding everyone. Eliza Carbines is the founder and Director of Tender Relief, a tendering support agency that works with businesses across regional WA.

Autumn 2020 WA WORKS 27

Energy

Rockingham lights the way in waste-to-energy movement The technology provider for WA’s second waste-to-energy plant says burning rubbish that would otherwise go to landfill makes both economic and environmental sense

By Peter Milne

only pay for the volume of rubbish provided to the plant. There is, however, a strong reason for councils to direct non-recyclable rubbish to waste to energy plants. Stammbach said many councils in Perth are paying well above $200 a tonne for landfill disposal. “Our cost is way below $200,” he said. The approach is consistent with the State Government’s waste strategy released in February last year that named energy generation as the second least preferred option for waste, after all opportunities to reduce, reuse and recycle had been exhausted.

ustralia has been a laggard in burning waste for energy, but a $1.2 billion spend on two plants in Perth’s south will see them join a fleet of more than 2000 similar facilities across the globe. Marc Stammbach is the Australian Managing Director of Hitachi Zosen Inova (HZI), the company providing the technology for the $511 million East Rockingham Resource Recovery Facility given the go-ahead in December. “The primary purpose is treatment of waste which now goes to landfill, which is a legacy and a chemical soup waiting for our grandchildren to be dug up,” Stammbach said. “These are chemical reactions that are bubbling on for hundreds of years and we’re pushing that into the future. That’s not sustainable.” Reducing landfill volumes by incinerating waste has been resisted in Australia despite landfills growing by more than 20 million tonnes a year. Stammbach said WA is taking the lead as politicians and the Environmental Protection Authority have, over the years, been open to considering the technology. He is less kind about the attitude in some other states. “I would bring it back to sheer ignorance,” he said.

28 WA WORKS Autumn 2020

“WA landfills took almost 2.4 million tonnes of waste in the year to June 2017” “That’s the easiest, if you want to avoid it you don’t look at it.” The two major concerns about burning waste are the health effects of the emissions and whether the plants may discourage recycling. Stammbach said similar plants in Europe and Japan operated in the middle of cities with no ill-effect. He said there was no disincentive for councils to increase recycling, such as the introduction of a third bin for organic waste, as they would

The strategy named disposal, such as landfill, as the option of last resort. WA landfills took almost 2.4 million tonnes of waste in the year to June 2017. The enormous amount, not far from one tonne a person, has reduced 40% in a decade. Heat from the 300,000 tonnes of rubbish a year to be burnt at the Rockingham plant will produce steam that will be used to generate 29 megawatts of power. The plant will also reduce the State’s

Energy

Construction progress at the Avertas Energy plant at Kwinana

greenhouse gas emissions by more than 300,000 tonnes a year. To the extent that the rubbish processed by the plant is organic material like paper and garden rubbish the power is classified as renewable energy as there is no net production on carbon dioxide. The CO2 absorbed by the plants balances the amount emitted when they are burnt. Emissions of the powerful greenhouse gas methane from decomposing landfills are also avoided. The income from selling power is “nice to have” according to Stammbach but councils seeking to avoid landfill is the main source of revenue. The plant will produce 70,000 tonnes a year of so-called bottom ash, similar to what is left over after a wood fire, that will be processed for use as aggregate for road construction. Stammbach said that, like any new product entering a market, the use of the aggregate will have to be explained to potential users. About 6000t of metal missed by conventional recycling will be recovered each year. Only the dust filtered from the gas going up the flue, called air pollution control residue, goes to landfill. “We concentrate the nasties in the 4 per cent...however they are not active anymore so they will not produce any more gas but they have to be safely contained,” Stammbach said, adding that Perth’s landfills were suitably sealed to store this type of waste safely.

John Laing, Masdar, Acciona and HZI will own the plant that will be built by Acciona and HZI. It will be operated by HZI and Suez. Stammbach said the main equipment will mostly be sourced from overseas due to the lack of an existing waste to energy industry in Australia. “However, there is a very significant portion of civil construction, excavation, roadworks, installation, erection, cabling, administration buildings, landscaping, which will all be local,” he said. Construction is expected to require 350 workers and a further 50 will operate the plant.

The plant is due to be completed by December 2022, a year after a similar plant 5km to the north in Kwinana is due to start taking in waste. Avertas Energy, owned by Macquarie Capital and the Dutch Infrastructure Fund, is spending $700 million on a plant that can divert 400,000 tonnes of waste a year from landfill, equivalent to a quarter of Perth post recycling rubbish, and generate 36 megawatts of power. Acciona is also building this plant, this time with technology from Keppel Seghers, and Veolia has a 25-year agreement to operate the plant. Construction is expected to create over 800 jobs and more than 60 full time employees will operate the plant.

Autumn 2020 WA WORKS 29

A queue of projects and some flexibility from monopoly transmission provider Western Power means the next few years will see a transformation of power generation in the South-West By Peter Milne

n 2015 the Federal Government set a target that 23.5 per cent of large-scale electricity generation would come from renewable sources by 2020 and the goal will be met. WA is behind the national average, but this could change in the next decade as a queue of new wind, solar and waste-to-energy plants prepare to launch amid several State Government reform initiatives. These are designed to bolster the stability of the grid, while making room for private sector projects on the network. In the 12 months to February 2020 about 13 per cent of electricity fed into the South West Interconnected System — that stretches between Kalbarri, Kalgoorlie and Albany — was renewable energy. Collie coal powered 45 per cent of the grid, pipeline gas accounted for 41 per cent, wind 12 per cent and solar farms less than 1 per cent, less than diesel and gas collected from landfill.

30 WA WORKS Autumn 2020

Power from rooftop solar is not counted as it is behind the meter. Proponents of new projects have been stymied by difficulties in gaining access to Western Power’s grid that is based on unconstrained access. Existing generators have rights to transmission capacity that cannot be constrained so the new projects have had to pay to upgrade the network. The arrangement has been likened to building enough freeway lanes for unimpeded traffic at peak hour. The State Government’s energy transformation strategy has a goal to move to constrained access by mid-2022. In road terms the new system will save a fortune building less lanes but will require the traffic to slow down when it is busy. To allow projects to progress before the reforms are in place Western Power in late 2018 offered up 900 megawatts of transmission capacity on the condition that output could be

limited when the network was busy. The $315 million Badgingarra wind farm was the first project to benefit from the Generator Interim Access arrangement. Its 37 wind turbines with blades that reach 150m high and flex in the wind to reduce structural loads started operating in May 2019. It was the first large-scale generator connected to the SWIS in five years. In January the first of 51 turbines was erected at the Warradarge wind farm. The project, owned by Bright Energy, a venture between Synergy, superannuation fund Cbus and the Dutch Infrastructure Fund has been reported to cost about $500 million. Alinta Energy’s $400 million Yandin wind farm, also with 51 turbines, is not far behind. In February it received its first delivery of massive 24-tonne turbine blades that stretch to 75m. Yandin is expected to start generating power by September.

Windy nights are useful Wind in much of the South West is stronger at night so the outputs of the three wind farms will help balance the daytime generation from rooftop solar panels. The Generator Interim Arrangement has also supported the addition of large-scale solar generation to the grid. A $40 million solar farm

Renewables projects queuing up Alinta Energy transports the blade of a huge wind turbine to its Yandin project

APA added to its Badgingarra wind farm opened in December. Risen Energy is close to completing a $160 million solar farm near Merredin. To date, the GIA has supported the investment of more than $1.4 billion into these five projects that have taken 649 megawatts of the 900 megawatts of grid capacity available before 2022. The Australian Energy Market Operator that manages the SWIS noted last year that there was concern that some renewable energy projects would have to delay connection to the grid due to the 900-megawatt cap placed on the GIA. WA Works understands the two waste to energy plants under construction in Perthâ&#x20AC;&#x2122;s south are in the queue for interim access, as is the 100-megawatt Cunderdin solar farm proposed by Sun Brilliance. Sun Brilliance chair Ray Wills said the company was in the final stages of negotiating a sale of the entire project to a buyer who would move it forward. Wills said the project had received considerable interest from several companies. The march of renewable generation in the South West is unlikely to slow after the GIA expires. Late last year South Energy received development approval for the 180-megawatt Waroona solar farm and the 100-megawatt Benger solar farm near Harvey.

A South Energy spokesperson said work to obtain a connection to the grid will to continue into next year. Financial close is expected six months after all approvals are received and then construction will take 12 to 18 months. As clean renewable energy is connecting to

the system, old-school coal is disconnecting. Synergy will close two ageing units in the Muja power station in 2022 and 2024. It will all help the government meet its aspirations for WA to have net-zero carbon emissions by 2050.

Connection status Access to the network secured Badgingarra Wind Farm

133 MW

APA, opened May 2019

Yandin Wind Farm

214 MW

Alinta

Warradarge Wind Farm

184 MW

Bright Energy

Merredin Solar Farm

100 MW

Risen Energy

Solar at Badgingarra wind farm

18 MW

APA

Understood to be in the queue for interim access Kwinana waste to energy

36 MW

Avertas

East Rockingham waste to energy

29 MW

New Energy & Tribe

Cunderdin solar farm

100 MW

Sun Brilliance

Waroona solar farm

180 MW

South Energy

Benger solar farm

100 MW

South Energy

And more to follow

Autumn 2020 WA WORKS 31

The blossoming of mine solar Once seen by WA mining as unreliable and expensive, photovoltaic solar power is gaining a firm foothold in one of the harshest places on the planet: the Pilbara, writes Stephen Bell

$1 billion-plus renewable energy rush is heating up with Rio Tinto the latest iron ore miner to join the sun club via a $150 million (US$98m) solar farm and battery backup system for its new Koodaideri mine in the Pilbara. Rio expects the 34MW photovoltaic plant to supply all Koodaideri’s electricity during peak sunny periods and about 65 per cent of the mine’s average electricity demand. For non-peak times, the mine will draw power from existing gas-fired sources on the company’s Pilbara power network, supported by a new 12MWh battery energy storage system in Tom Price that will provide reserve capacity.

32 WA WORKS Autumn 2020

The company estimates the solar-battery combination will lower annual carbon dioxide emissions by about 90,000 tonnes compared to conventional gas powered generation — the equivalent of taking 28,000 cars off the road. Rio Tinto taking a shine to solar, alongside Fortescue’s big commitments (see below), are a big tick for the technology in the hot and cyclone-prone Pilbara environment. Up to now only a few gold and base metal mines have invested heavily in PV installations, though usage is growing in those sectors as well as costs fall and reliability increases. “The construction of our first solar plant in

the Pilbara is a significant milestone for the business and an important step in reducing our carbon footprint,” says Rio Tinto iron ore Chief Executive Chris Salisbury. “We are investigating additional renewable energy options in the Pilbara, as well as other opportunities to reduce emissions across our entire global portfolio, building on the 43 per cent reduction in absolute greenhouse gas emissions since 2008.” WA Works understands about 30 construction workers will be needed to build the solar farm and roughly the same for the battery, which will be tendered and managed separately. It will be Rio’s first company-owned solar farm, though its Weipa bauxite operation in Queensland also taps an onsite solar plant. Koodaideri’s plant will consist of about 100,000 panels covering 105 hectares. Construction is expected to begin later this year and is due to be completed in time for the mine’s start up in late 2021. The $4b ($US2.6b) Koodaideri project, with a forecast production capacity of 43Mtpa, was approved by Rio in November 2018.

Fortescue goes big on hybrids Rio Tinto’s move into solar followed hard on the heels of Fortescue’s $1 billion-plus commitments to hybrid energy and transmission infrastructure in recent months.

Energy found on the CCI-managed ICN Gateway website: gateway.icn.org.au. Meanwhile, Fortescue chief operating officer Greg Lilleyman says it is “early days” for the transmission and generation projects.

“The company estimates the solar-battery combination will lower annual carbon dioxide emissions by about 90,000 tonnes”

Since October, Fortescue has: • Signed up Alinta Energy to build, own and operate at $200m, 60MW solar PV generation facility at the Chichester mining hub. A 60km transmission line will link the Christmas Creek and Cloudbreak mines with Alinta’s Newman gas-fired power station; • Approved its $380 million ($US250m) Pilbara Transmission project, which consists of 275km of high voltage transmission lines connecting Fortescue’s mine sites; and • Green lighted its $690m (US$450m) Pilbara Generation project, which includes 150MW of gas fired generation, together with 150MW of solar photovoltaic (PV) generation, supplemented by large scale battery storage. The latter two work programs form the Pilbara Energy Connect (PEC) project, which will be built, owned and operated by Fortescue, says CEO Elizabeth Gaines. She says PEC provides Fortescue with a hybrid solar gas energy solution that enables low cost power delivery to the $4b (US$2.6b) Iron Bridge magnetite project, while “leveraging existing assets”. “Our modelling indicates we will avoid up to 285,000 tonnes of CO2-equivalent per year in emissions, as compared to generating electricity solely from gas,” she says. When complete the PEC and Chichester projects will supply up to 30 per cent of

Fortescue’s stationary energy requirements from solar, while the integrated network will position Fortescue to “readily increase our use of renewable energy in the future”, Gaines says. Construction of the Chichester and Pilbara transmission projects started early this year, while the generation project is expected to begin site works this month (April). Contract opportunities for both the Pilbara transmission and generation projects can be

“The priority is on the transmission connection from the Solomon power station to Iron Bridge to ensure we have commissioning power available from, first and foremost, the existing spare (gas) generating capacity at Solomon,” he says. The design of Iron Bridge project is more than half-finished and 2020 will mainly be about “the engineering progress and the procurement and contracting activity”. “There is close to US$2b ($3b) of work to be committed this calendar year,” Lilleyman says. Magnetite processing is energy intensive. The industry will be watching with interest in 2022 as Fortescue cranks up its Iron Bridge processing plant, partly by harnessing power from the sun.

Autumn 2020 WA WORKS 33

Policy Corner

The R’s of Energy Reform With reports, roadmaps and rule changes upon us, energy market reform is in full swing to avoid blackouts, writes Louise Thomas

eform and reliability are two of the more prominent R’s used in the context of Western Australia’s energy market as it transitions into a new decade of change, led by the huge influx of solar power. Rooftop solar has become increasingly affordable and popular in WA, with more than 280,000 households installing solar photovoltaic (PV) systems on their rooftops over the past ten years. Solar PV is now the largest energy source on the State’s main electricity grid, the South West Interconnected System (SWIS). The rapid uptake of solar PV has created challenges for the SWIS, including increased variability and volatility of the system. These issues are most pronounced when renewable generation drops suddenly, for example due to a passing cloud band, leaving a shortfall in supply that requires the fast ramp up of traditional thermal generation. This increases wear and tear and maintenance costs for traditional thermal generators, including coal-fired power plants that were not designed to be ramped up and down in this way. The Australian Energy Market Operator (AEMO) has warned of rolling blackouts on the SWIS by 2022 — or at worst, a system-wide blackout — if these issues aren’t addressed as a priority. The WA Government’s energy sector reforms led by the Energy Transformation Taskforce are

34 WA WORKS Autumn 2020

focused primarily on bolstering the reliability and security of the grid to overcome these challenges and keep the lights on. This will be delivered through a whole of system plan, distributed energy resources roadmap and reforms to the regulatory framework.

“Solar PV is now the largest energy source on the State’s main electricity grid” Roadmaps and reports The release of the State Government’s distributed energy resources roadmap is imminent. It’s expected to outline a 5-year plan for harnessing and managing distributed energy resources such as solar PV and microgrids in a way that allows them to contribute to the security and reliability of the whole system. Along with ensuring reliability of the grid, reform initiatives need to encourage private sector investment and participation in the State’s energy sector. Industry is a vital part of the sector and has demonstrated its capacity

to innovate and supply a range of energy technologies and services across WA. The role of private providers in developing and delivering microgrids and associated technologies is emphasized in the Economics and Industry Standing Committee’s recent microgrid inquiry report. The report found that government trading enterprises should create space for private sector participation in delivering microgrids, battery storage technologies and stand-alone power systems across the State.

Removing subsidies and retail contestability The Government can also encourage innovation and investment in the energy sector by ensuring market conditions have effective pricing signals that are supportive of new entrants. The government has made progress in recent years on the closing the gap between the price of electricity and the cost of supply and it remains a crucial pathway to facilitate private sector investment and drive down electricity prices. This could be taken further by removing price-distorting cross subsidies and retiring aging generation assets that deter investment in new generation technologies. Moving towards full retail contestability by lowering the contestability threshold so that households and businesses can choose their supplier will promote competition and expand the customer base, encouraging private sector investment in new generation assets and technologies. Louise Thomas is CCIWA’s strategic industry policy adviser.

Memo from ICN Sparkling LNG prospects for suppliers in the know Suppliers are poised to cash in as LNG facilities move to operations and maintenance, but the key is knowing where the work will be, writes Ray Loh

ig new LNG developments can cost a small country to build. For instance, Woodside’s proposal to develop the offshore Browse gas field and pipe it to an upgraded North West Shelf LNG plant near Karratha is forecast to cost $31 billion (US$20.5b). That’s just a few billion dollars short of Iceland’s GDP. But, while impressive, the construction of a big LNG project is a one-off, a bit like a short-lived gold rush for contractors. To illustrate this point, Chevron spent more than $130 billion last decade building its Gorgon and Wheatstone LNG projects in the Pilbara. The two giant ventures generated 17,000 construction jobs, triggering a massive boom for engineering companies and other suppliers. Contractors beefed up to accommodate the huge workforce and management requirements but, once construction activity started petering off mid-decade, many were left high and dry. A mini-resurgence in boom-style oil and gas construction is only now starting to emerge via new projects such as: • Woodside’s $16b Scarborough to Pluto (FID targeted this year), the $30b Browse to North West Shelf (2021), and the Pyxis project (2019); • Santos’s Barossa LNG and Dorado liquids (2021); • Chevron’s multibillion-dollar Gorgon Stage Two (2018); and • Shell’s multibillion-dollar Crux. Several of this list are in Front End Engineering and Design (FEED), hence the real work will only flow through in the next one-to-two years after final investment decisions (FIDs) are made. LNG plant maintenance is less of a gold rush and more of a gem for suppliers — its ongoing, at least for a few decades. Surprisingly, an LNG project can cost more to run over its lifetime than its initial capital cost. The production facilities that arose in the boom, including those in Queensland and the Northern Territory, will now need to be maintained for up to 30 years. In total, it is estimated this maintenance phase

will generate recurring annual expenditure of between $8 to $9 billion, generating a raft of new opportunities for the supply chain. Some savvy suppliers started moving their business models several years ago to concentrate more on the operational and maintenance (O&M) phase of oil and gas plants. The benefits of upcoming O&M opportunities for sub-suppliers include: • significant opportunities in small and large brownfield expansions (i.e. executing any capital works that may have been deferred during construction, debottlenecking and fit-for-purpose retrofitting programs). This is on top of normal O&M requirements; • more predicable workflows, allowing suppliers to retain essential skills and invest in new capabilities as there is ongoing, recurring work on each project; and • economies of scale thanks to the increasing number of LNG facilities. That could mean an environment capable of developing a significant O&M export capability. The upcoming construction phase presents a good opportunity for suppliers to gather the skills that will be required for O&M work. Should your business be fortunate enough to provide equipment or services on an LNG plant during construction, you will have intimate knowledge of the systems involved. This will make it much easier to find and

retain work during the O&M phase. Businesses are encouraged to register with ICN Gateway (www.gateway.icn.org.au) to receive notifications of new project opportunities and use that as a pipeline of potential future work. For more immediate O&M opportunities, businesses will benefit from ICNWA’s new “Operations, Maintenance and Facilities Management of Australian LNG Facilities” report, which provides a comprehensive list of companies that may outsource work for LNG opportunities. These include major contractors such as UGL, Downer, and Monadelphous that tend to secure regular maintenance roles on LNG and oil and gas plants. The report gives Australian sub-suppliers of services and goods an awareness of the increased range of opportunities that are now available for the key O&M requirements of a typical onshore operational LNG facility. The report can be downloaded at: icn.org.au/ publications/LNG_operations_report Ray Loh is the manager of ICNWA Industry Capability Network. ICN works with projects owners who list their projects on ICN Gateway. ICN consultants actively work with both project owners and suppliers to identify capable Australian suppliers for these projects.

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Gaining

traction A $1 billion nickel project in one of the remotest parts of WA is slowly gaining momentum, writes Stephen Bell

wo decades after its discovery, the remote West Musgrave project is shifting up a gear after Adelaide-based OZ Minerals revealed plans for a $995 million nickel and copper mine. Depending on how the dust settles on the COVID-19-induced market upheavals, the long-mooted project could be approved as soon as the third quarter of next year. OZ and partner Cassini Resources released a prefeasibility (PFS) study showing the existing mineral deposit could underpin a 26-year open pit copper and nickel sulphide mine. The PFS confirmed the project can be a “low cost, long life mine producing copper and nickel, both in-demand minerals for the renewable and electrification industries”, according to OZ Minerals CEO Andrew Cole. “We are pleased the study has identified a means for us to reduce the project’s carbon footprint significantly and overcome the historical challenge of affordable power for West Musgrave,” Cole said. “We believe, supported by the views of potential renewable energy suppliers, that 70-80 per cent of the power needs for West Musgrave can be supplied by renewable sources, supplemented by battery storage and diesel

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or trucked gas-fired generation. “The PFS base case assumes the power solution will be outsourced to a third party, with power purchased back over the life of the asset.” West Musgrave has a rich history of exploration and corporate intrigue. Discovered by the long-defunct Western Mining Corporation (WMC) in 2000, its early high-grade copper and nickel hits inspired a frantic pegging rush around WMC’s tenements near the intersection of the WA, South Australian and NT borders.

province, while many of the junior explorers couldn’t afford to run field programs in the out-of-the-way region — more than 1500km north east of Perth. BHP acquired the project in 2005 via its takeover of WMC, but progress was glacially slow. After struggling to replicate the grades of the early drill hits, BHP eventually decided the project didn’t meet its objectives and sold it, in 2015, to Perth-based Cassini. Cassini formed a joint venture the following

“70-80 per cent of the power needs for West Musgrave can be supplied by renewable sources” The rush ran out of steam a year or so l ater, partly because WMC’s follow-up drilling results weren’t as flash as the Nebo-Babel discovery hole. The lack of any spectacular new hits sucked the hype out of the supposed new minerals

year with OZ, a major copper and gold producer in South Australia, which has increased its ownership of the project to 70 per cent by reaching expenditure thresholds. Under the joint venture agreement, OZ must continue to sole fund the Nebo-Babel

Drilling at the West Musgrave nickel project

studies until a final feasibility study and decision to mine are delivered.

The view from Cassini Speaking before COVID-19 tore through global markets, Cassini Managing Director Richard Bevan told WA Works that “critical timeline activity” such as environmental approvals and a mining access agreement with the local community was continuing. However, OZ had decided to bring forward a funding program — previously slated for after the definitive feasibility study (FS) —

to the first half of this year. “Over the next couple of months, ourselves and OZ will focus on what is the best way to fund this project,” he said. Though a bit like “putting the cart before the horse”, the strategy would determine part of the FS scope, especially around drilling, and the timeline. “A more definitive work program and schedule for the feasibility study will come out after that funding decision in the next couple of months,” Bevan said. “If you sort out your funding and the funding structure, it rolls through into what’s required in the feasibility study to get you to a decision to mine.” Alongside the funding work, OZ Minerals is expected to tender in the next few months for a project engineering partner. Perth-based GR Engineering authored the prefeasibility study and is likely to be a contender. OZ is forecasting a decision to mine by the third quarter of next year, with mine ramp-up starting in late 2023 A new airstrip is likely to be a priority for early works as the project partners will need to fly hundreds of construction workers to and

from the site once the mine is approved. Bevan said a 30-seater aircraft can land on the current strip, with the flight from Perth taking about two-and-a-half hours. A bigger airstrip would accommodate jet aircraft, enabling more passengers and a shorter journey time, he said. Meanwhile, the investment community is taking a cautious approach to the PFS results. Macquarie Bank analysts say the study highlights a “positive” economic outlook for the project. “However, a key requirement will be the need for a third-party to agree to a power contract, thus enabling OZ to achieve the costs highlighted, and for the Australia/US dollar exchange rate to remain low,” Macquarie says. Citibank, meanwhile, highlights technical and location risks. “Market concerns over the project’s remote location are likely to linger,” it says. The bank also notes that OZ plans to use parallel vertical roller mills to grind the ore instead of the much more common ball and semi-autogenous mills. This is to enable the mills to ramp up and down in response to hybrid solar-wind-batterydiesel power availability, it says.

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Resources

Infant Mondium bags big wins It may be a relatively new player in the engineering and construction market, but Mondium is already making an impact on some of WA’s biggest mining projects

By Peter Williams

Carnie says Mondium won the Rio contract in a “hard-fought” three-way contest in which the bidders were required to put forward innovative concepts with a competitive price tag, then prove they had the capability and strength to deliver it.

ndrew Carnie had been bracing for his Truman Show moment. It’s that point in the Hollywood movie that actor Jim Carrey’s character finds out his picture-perfect hometown is actually the set of a 24-hour TV show and everyone he knows are actors. After being appointed managing director of engineering and construction joint venture Mondium 18 months ago, Carnie thought things might be too good to be true. Shareholders Monadelphous (60 per cent) and Lycopodium (40 per cent) were separately saying the same things. Their respective directors’ down-to-earth, get-to-know-you-first approach seemed too much alike. “They may as well have been in the same company,” Carnie says. “The way they behaved, the way they spoke, the vision for Mondium. I was actually a little bit taken back at first. I thought, ‘where’s the catch?’” “A year and half later I’m absolutely thrilled to say that it’s not the Truman Show. This has actually been reality. The shareholders are completely aligned and 100 per cent behind Mondium. Hence why I think we’re starting to pick up major contracts.” The WA companies and people behind the joint venture have rock-solid reputations. Led by John Rubino and Rob Velletri, Monadelphous

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Firepower to open doors

has an enviable 30-year track record in resources, energy and infrastructure construction. Lycopodium, chaired by Michael Caratti and run by Peter De Leo, is an internationally renowned engineering firm. After a gradual build-up since its 2016 inception as a vehicle for engineering, procurement and construction (EPC) work in minerals processing, Mondium in January won a $400 million contract to build a Pilbara iron ore mine expansion project for Rio Tinto. The Western Turner Syncline Phase 2 project award follows Mondium last year picking up two contracts at Talison Lithium’s Greenbushes lithium project in the South West. One was for a tailing retreatment processing plant worth about $100 million.

A three-year-old company ordinarily wouldn’t have the firepower to compete at this level. “The reason Mondium gets to the table is because of the pedigree of the shareholders,” Carnie says. “The doors open because the tier one clients know they have a safe pair of hands if they get Monadelphous or Lycopodium involved.” “If you had to organically get to this stage, I think you’re talking about a business that’s 20 years old.” Monadelphous Engineering Construction Executive General Manager Dino Foti says customers saw value in his company and Lycopodium integrating and functioning as a single entity. “By establishing Mondium with the capability to deliver in-house design and detailing, fabrication, (structural, mechanical, piping, electrical and instrumentation) and civils, we could develop and deliver a seamless ‘one-stop-shop’.” In a year, Mondium core staff numbers housed at Lycopodium’s Adelaide Terrace premises have surged from seven to 50. Employees seconded from the parent companies are in the range of 120-140.

Resources

The conveyor at Rio Tinto’s Western Turner Syndine iron ore mine

Aside from its shareholders, Carnie credits Mondium’s success to date compared with other joint ventures to long-term planning. He believes single-project JVs spend the first six months figuring out how the two companies can work together, rather than how they can deliver the project. “If you look at the charts of where projects go wrong, they go wrong in the first few months. There’s very little you can do in the tailing months to steer them back on track.” Hence Mondium’s gradual entry to the market, initially under the leadership of Lycopodium director Bob Osmetti, focusing on lower-value projects and building up to a targeted niche of contracts in the $50 million to $500 million range. Mondium avoids the staff downtime problems other EPC contractors have at different stages of a project by seconding people only when they’re needed. Then there’s the ability to ramp up quickly using the shareholders’ resources.

compound. Under a pre-bid agreement, Kerman had been involved since the contractor involvement phase. “That’s where our focus will be over the next one, two years: finding partners that offer something that we don’t already have in the group who want to come in at the early stages of a concept through tender,” Carnie says. Carnie believes what he personally brings to the table is an understanding of both the design and construction phases and an appreciation of what makes the people on both sides tick. He says it was forged over more than two decades working on projects across Australia and Asia with McConnell Dowell. “My passion is EPC. I love the possibilities of a multi-discipline project.

“I liken it to a little boy with a model car. The excitement is in creating something from nothing, interpreting drawings, bringing together thousands of bits and pieces and learning something new. Then you park the model on the shelf and get on to the next one.” Editor’s note: Last month Mondium was mobilising staff and subcontractors to Western Turner Syncline Phase 2, just as the State and Federal governments began instigating tough measures to lessen the impact of the COVID-19 outbreak. At the time of writing, it was unclear if these measures, or the expected increase in infection rates, would delay some resources projects relying on FIFO construction workers, such as WTS2.

Getting subcontractors in early The joint venture can’t do everything on a project, of course, so Carney is also keen to establish ongoing relationships with subcontractors — and get them involved at the tendering stage. An example of that was Kerman Contracting, which Mondium in February awarded a $55 million job on the Rio project delivering nonprocess infrastructure facilities and an explosives

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Major Projects List

Public infrastructure saves the day Big new road projects south of Perth, and two key Pilbara power projects feature in more than $3b of new listings, writes Stephen Bell

ith $3.14 billion worth of new entries in the latest edition of the WA Major Projects list, there is plenty of hope on the horizon for a supply chain grappling with the bruising impact of COVID-19. Published exclusively for subscribers of WA Works, the new list contains seven new projects in roads, rail infrastructure, accommodation, mining and Pilbara power generation. But, with Australia preparing for a serious economic hit from the pandemic, I can hear sceptical readers asking, “how many of them will actually get up?”. It is a fair question, given the uncertainty and panic gripping markets as these words were written. Yet the answer remains, “most of them”. That’s because much of the value is in public infrastructure projects, which will be key avenues of employment while in construction and deliverers of more efficient transport systems after their delivery. The $852 million Bunbury Outer Ring Road, for instance, is funded by the Federal ($681.6m) and State ($170.4m) Governments. And the procurement process is already ramping up. Last month two consortia were shortlisted and invited to submit detailed proposals to design and construct the road: • The Forrest Alliance (CPB Contractors, Carey MC, Densford Civil, GHD and BG&E)

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• Southwest Connex (Acciona, NRW Contracting, MACA Civil, AECOM and Aurecon)  The State Government anticipates an alliance contract will be awarded before the end of the year with construction to begin in 2021, subject to environmental and heritage approvals. Main Roads will also be calling for early tenders for the supply of an initial quantity of crushed rock road base. This will give local suppliers time to identify potential material sources, plant and personnel requirements for the early stages of the project. Transport Minister Rita Saffioti said the project would deliver huge benefits for the economy both during its construction and once in operation.  “The Outer Ring Road is the biggest transport infrastructure project ever planned for the SouthWest and will generate significant economic and employment opportunities,” Saffioti said. “Maximising local business procurement is a key objective for the project. The procurement process includes set criteria to ensure potential contractors incorporate initiatives to maximise local content. The State Government had also opened a Local Capability Fund to support small and medium South West firms to tender for work on the road. Saffioti said that 5680 “direct and indirect employment opportunities” would be generated during construction. The $175m Albany Ring Road, meanwhile is

a three-horse-race between BMD Constructions, CPB Contractors and Decmil. The lucky trio have been invited to submit detailed design and construction proposals to Main Roads for the long-awaited heavy haulage route around Albany, in the Great Southern region. The State Government forecasts that up to 1000 jobs will be created during the construction phase, which is due to begin before the end of the year, subject to approvals. The next biggest chunk of the newbies is two power projects driven by the needs of the iron ore industry: Fortescue’s $780m (US$450m) power generation project and Rio Tinto’s $170m (US$98m) Koodaideri solar power plant. Fortescue’s venture, which involves 150MW of gas-fired generation and 150MW of solar photovoltaic, will enable the delivery of lowcost power to the company’s huge Iron Bridge magnetite project when it starts ramping up in 2022. It is possible Fortescue might delay the start-up of Iron Bridge, the first attempt by a WA iron ore major to build a commercial magnetite plant, which would push out the timing of the generation project. At the time of writing, however, iron ore prices were holding up well compared to several other commodities such as oil. Nevertheless, it is worth noting that some large corporates had already scaled back growth expenditure. Rio’s solar project, meanwhile, is a sure bet as it pushes ahead with the Koodaideri mine. Construction of the PV facility and back-up battery is due to begin late this year, while the mine is scheduled to start producing ore in late 2021. OZ Minerals’ $995m West Musgrave nickel project, in a remote corner of WA near the intersection of the South Australian and Northern Territory borders, slots into a more speculative category. Oz Minerals and junior partner Cassini Resources are yet to sort out funding and must still complete a definitive feasibility study prior to a forecast go-ahead late next year. Nickel was holding up relatively well compared to some other base metals, but the medium-term outlook was dependent on the speed of global economic recovery following the worst of the virus. The two owners also need to establish an economic power solution for the remote site. But with nickel now classed as an electric vehicle battery metal, the project certainly has a chance. And Oz Minerals showed with its recent development of the deep Carrapateena coppergold mine in South Australia, which achieved its nameplate milling rate in March, that it is not afraid of taking on challenging projects. Here’s hoping all the new entries go ahead as planned.

Resources

BHP hires more workers, speeds payments

s uncertainty about the supply chain impact of the COVID-19 pandemic swirled through the WA resources sector, BHP offered a sliver of good news, saying it would hire an extra 1500 people to keep its Australian mines open. The new jobs would be offered as six-month contracts and covered a range of skills needed by BHP operations in the “short term”, the company said. The jobs included machinery and production operators, truck and ancillary equipment drivers, excavator operators, diesel mechanics boilermakers, trades assistants, electricians, cleaners and warehousing roles. It is understood about 400 of the roles will be in BHP’s WA and iron ore nickel operations. Following the initial six-month term, the company planned to offer some permanent positions. “As part of BHP’s social distancing measures we are introducing more small teams with critical skills to work dynamically across different shifts,” said BHP Acting Minerals Australia President Edgar Basto. “The Government has said the resources

industry is vital in Australia’s response to the global pandemic — we are stepping up and providing jobs and contracts. “Our suppliers, large and small, play a critical role in supporting our operations. It is a tough time for our communities and the economy. We must look out for each other as we manage through this together,” he said. Separately, CEO Mike Henry said BHP would also ease the financial burden on its smaller suppliers by cutting payment terms. The company’s supply chains were still open, and it was implementing measures to support small business partners and regional communities through “accelerated payment of outstanding invoices and the reduction of payment terms from 30 days to seven”, Henry said. “And we currently have adequate supplies to operate and maintain critical equipment, although we are seeing pockets of disruption for some items such as disinfectant. “While markets have been volatile, our products are still in demand, and with the exception of oil, which has come off quite sharply and more recently, copper, commodity prices

BHP CEO Mike Henry

have held up well,” he said. In further good news for the WA economy, which is heavily reliant on the regular flow of iron ore royalties, Henry reported “increased activity in China as regions are ramping up production with strong government support”. Nevertheless, he conceded the challenges presented by COVID-19 were “fluid” and changing on an almost daily basis. Meanwhile, Chamber of Minerals and Energy boss Paul Everingham echoed BHP’s comments, saying the WA resources sector would keep operating as it was “vital” to the wellbeing of the state and national economies. “We do not believe production will need to be curtailed or stopped,” Everingham said. “The man on the street that we employ, the small businesses that we support, the governments that we pay a lot of royalties to, tell us how vital it is that our operations remain open during this difficult economic time. Everingham added that resources companies had set up thresholds for FIFO workers at airport check-in counters, to get on planes and to enter mine sites.

Monadelphous flags revenue impact from virus

onadelphous has provided the first inkling of the extent of collateral damage to projects and the supply chain from COVID-19, after last month withdrawing its full-year guidance of 10 per cent

revenue growth for the year ending June 30. The Tier One engineering contractor also said it had established a dedicated team to monitor, assess and provide guidance to its business daily, taking advice from government agencies and the World Health Organisation, and working in partnership with its customers globally. Monadelphous Managing Director Rob Velletri said the company was taking action to manage the business through this “unprecedented period, to keep our personnel safe, sustain business continuity and ensure it remains well positioned for when conditions stabilise”. “We will continue to support our customers and the communities in which we operate during this challenging time,” Velletri said. On February 18 Monadelphous told the market it expected an approximate 10 per cent growth in revenue for the 2019-20 financial year. At the time, it cautioned that this was

dependent on the extent and duration of project and supply chain delays resulting from the COVID-19 outbreak. Since the release of the guidance, there had been a significant escalation of measures taken by governments across the world, as well as its customers, to prevent further spreading of the virus. These measures had precipitated a slowdown in economic activity and, as a result, the company had withdrawn its previously published guidance, the company said. Due to the significant uncertainty relating to the extent and duration of this slowdown, the company was unable “at this time” to provide revenue guidance for the financial year ended June 30, it said. Investment bank Macquarie estimated that Monadelphous’ income in the first half to December 31, was dominated by oil and gas (30 per cent of revenue) and iron ore (27 per cent).

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Resources

Oil plunge spurs Burrup Hub delay The unsettling combination of the COVID-19 pandemic and low oil prices have prompted both Woodside and Santos to delay their respective Australian LNG projects, writes Stephen Bell

oodside has deferred investment decisions on its two key Burrup Hub LNG projects and slashed spending by half this year as part of “swift action” to combat the destabilising effects of low oil prices and COVID-19. It means the company’s targeted final investment decision (FID) on the $18 billion (US$11b) Scarborough-to-Pluto development has been pushed out by 12 months to 2021, while FID on the $34b (US$20.5b) Browse project — previously slated for next year — has also been delayed. Perth-based Woodside said finalisation of commercial agreements and regulatory approvals will continue for Scarborough, Pluto Train 2 and Browse and there will be some ongoing engineering work in preparation for their respective FIDs. Nevertheless, engineering companies already contracted by Woodside may face a period of uncertainty. Pluto 2 head contractor Bechtel had provided a fixed price to Woodside for building the second LNG train, while it recently awarded an early works contract to ATCO for construction of the T2 accommodation village. “These are extraordinary times, that no one could have foreseen, but Woodside enters this period of significant uncertainty with one of the stronger balance sheets in our industry and world-class, low-cost producing assets, which are resilient to commodity price

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fluctuations,” Woodside CEO Peter Coleman said. “Our disciplined approach to cash flow and debt management has positioned us to respond quickly and decisively. The measures we are implementing will preserve cash during these challenging months and ensure that in the longer term we can successfully execute the growth strategy we have in place.

• Deferral of targeted final investment decisions (FID) for Scarborough, Pluto Train 2 and Browse; • Continuing to progress capital investments in Sangomar Phase One development in Senagal, along with the Pyxis Hub and Julimar-Brunello Phase 2 in WA. Meanwhile, Woodside said non-essential activities for its 2020 work plan had been cancelled or deferred, while operating expenditure was cut by $100m. This will result in the major turnaround for LNG Train 3 at the North West Shelf Karratha Gas Plant (KGP) deferred to September and the major turnaround for Train 4 deferred to August 2021.

“Scarborough-to-Pluto development has been pushed out by 12 months to 2021” “The development of the Scarborough and Browse gas resources through Woodside’s proposed Burrup Hub remains among the world’s most cost-competitive LNG investment opportunities and one which will provide significant economic returns to shareholders, governments and communities for decades to come,” he said. The key features of Woodside’s belt-tightening responses were: • Changes to the 2020 work plan resulting in a 50 per cent cut reduction in forecast 2020 total expenditure to about $4b (US$2.4b); • Review of all non-committed activities supporting Woodside’s growth activities resulting in a 60 per cent reduction in Woodside’s 2020 guided investment expenditure;

Woodside also reduced the scope this year of life extension activities at KGP. The company said the full impact of lower oil prices won’t be realised until late in the second quarter of this year due to the lag between the oil price and realised LNG prices.

Santos tightens belt Separately, Adelaide based Santos, deferred a final investment decision on the huge Barossa backfill LNG project after it also slashed planned capital expenditure this year. The company’s 2020 capex has been cut by $905m ($US550m), or 38 per cent, with part of the decrease reflecting the “re-phasing in expenditure” for the Barossa and PNG LNG expansion projects.

Ngarluma Elder Pansy Hicks (front) with Woodside and Bechtel staff at a welcome to country for the village construction site

Woodside’s Pluto LNG facility

Santos is in the process of buying ConocoPhillips’ assets in northern Australia, including stakes in Barossa and the Darwin LNG plant, and had expected to take FID on the backfill project in the second quarter once the transaction completed. The deal will now complete in the first half, subject to third-party consents and regulatory approvals, it said. “Whilst the current oil price dynamic is challenging, the eventual recovery will create opportunities for companies positioned to act on them,” Santos CEO Kevin Gallagher said. “Our strategy to leverage existing assets and infrastructure remains unchanged and we expect to pursue these exciting opportunities when conditions permit. “However, given the uncertain economic impact of COVID-19 combined with the lower oil price, we expect to defer FID on Barossa until business conditions improve. “Barossa remains an important project for Santos due to its brownfield nature and its low cost of supply.” In October, current operator ConocoPhillips awarded a contract to MODEC International to build and install the Barossa floating production, storage and offloading (FPSO) facility, to be permanently located in the offshore development area 300 kilometres north of Darwin. And the Allseas Group was signed up in September to build and install a 260-kilometre pipeline to transport Barossa gas to a tie-in location on the existing Bayu-Darwin pipeline. Meanwhile, Santos made no direct mention of its $3.3 billion (US$2.2b) Dorado oil project off the Pilbara coast, which is due to begin front end engineering and design (FEED) in the second quarter.

ATCO secures Pluto village works

final investment decision on Woodside’s Pluto LNG expansion project may be many months away, but the local energy giant moved ahead with early works on a Karratha village to house Pluto construction workers. Woodside’s Meg O’Neill revealed ATCO’s contract win on the village — from Pluto T2 head contractor Bechtel — at the AOG conference. “Bechtel has awarded an early works contract to ATCO Western Australia for its Pluto Train Two construction accommodation village in Karratha,” O’Neill said. Most of the work has been awarded to local suppliers such as Karratha Earthmoving, she added. WA Works understands that the work was expected to include: • Mobilisation of temporary site offices and facilities; • Clearing of the site; and • Construction of an access driveway to the site from Madigan Road. However, major construction of the village, designed to accommodate up to 2,500 non-local Bechtel and subcontractor employees at peak construction, remained dependent on Woodside making a final investment decision (FID) on the $18 billion Scarborough-to-Pluto project. “Aside from local jobs in Karratha, should construction proceed, ATCO will build all of its modules at their state-of-the-art manufacturing facility in Hope Valley, 35km south of Perth,” O’Neill said. “Currently only a small scope of work has been awarded, but when a positive final investment decision is made, a variety of jobs, and contracts will be available,” she said. O’Neill was speaking a few weeks before Woodside CEO Peter Coleman announced that FID on Scarborough-to-Pluto, previously expected this year, would be pushed out to 2021 in response to low oil prices and the impact of the COVID-19 outbreak. With early works for the accommodation village due to begin, Bechel posted on social media that it had invited Ngarluma Elder Pansy Hicks from the Murujuga Aboriginal Corporation Circle of Elders to provide a Welcome to Country for people working on the Karratha site.

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Defence

Henderson OPV build sets sail Civmec is about to make history with the Navy’s offshore patrol vessel (OPV) construction program about to move into its big shed, writes Peter Williams

fter years of political arguments, bidding contests, corporate wrangling and the development of a massive shipbuilding facility, construction of offshore patrol vessels is on the cusp of getting under way in Henderson. The transition of the 12-ship, $3.6 billion Federal Government program from South Australia to WA will take place around mid-year, when workers start putting the third OPV together in Civmec’s brand new shed. Led by Luerssen Australia, up to 1000 workers from dozens of contractors will construct the remaining 10 Royal Australian Navy vessels in the program through to 2030 at the Australian Marine Complex site.

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The 70-metre-high facility towers over the waterfront and dwarfs what are in fact the sizeable adjoining buildings of engineering and construction company Civmec. When WA Works visited in early March, the $85 million complex was a hive of activity with construction of the car park, office fit-outs, installation of lifts, completion of internal roads and landscaping in progress. When completed, Civmec chief executive Pat Tallon says employees will be able to get from the elevated car park to their workstations via walkways and lifts within five minutes. Fullyloaded forklifts carrying will be able to travel between levels of the complex using large lifts. The numbers are impressive as the sweeping

view of the interior from the top level of the structure. It has 53,000 square metres of floor space, including three main assembly bays serviced by 53 overhead cranes. The main cranes in the assembly bays can hoist 200 tonnes. Remarkably, assembly of the 80m-long OPVs won’t take place in the biggest, central assembly bay. With an internal height of 60m, the space is capable of accommodating two of the Navy’s 147m Air Warfare Destroyers side by side.

Three at once Tallon says the OPV program, in which up to three vessels will be under construction at one time, will only take up 40 per cent of the available space. It’s evidence of intent to bid for Navy vessel sustainment work as well as construction in the decades to come. “We said we’d make it big enough,” Civmec executive chairman Jim Fitzgerald says. “You know we were planning for the future more than anything when we built it.”

Defence “A lot of people who visit us from the shipbuilding industry say they’ve never seen anything like it,” he says. “The size of it. It’s a big statement for WA and for Australia.” The company was set to begin cutting steel by the end of March for the third vessel, a continuation of the work it’s been doing for the first two, which are being assembled at shipbuilder ASC’s facilities in Osborne. The split program is the outcome of a political fix to avoid a “valley of death” in shipbuilding work in SA between completion of the Air Warfare Destroyer program in 2018 and the start of the $35 billion Future Frigate program this year. It’s an arrangement that Luerssen Australia chief executive Jens Nielsen diplomatically describes as “unique”. “It was a government decision and we are supporting this,” he tells WA Works. “We understand the reasons. “The logistics aspect is not the challenging

bit more. But this is something to be introduced over the next couple of years.” More than 300 Australian companies are involved in the build. While Luerssen manages the shipbuilding process, Civmec is doing the steel and piping work. The Australian arms of Saab, L3Harris and Engie Axima will respectively provide the combat management, integrated platform management and HVAC systems. Penske Power Systems is supplying the Rolls Royce-produced MTU engines and Tasmania’s Taylor Bros Marine outfitting the interior. Luerssen says the proportion of WA content as of the third vessel will be “large”. WA subcontractors and suppliers include Allgo Engineering, APTS, Benalty, BlueZone Group, CNW Energy, Galvins Marine & Industrial, International Corrosion Services, Platinum Logistics, RM Surveys, Stirlings Performance Steel, Taylor Marine and Watmar.

“Up to 1000 workers from dozens of contractors will construct the remaining 10 Royal Australian Navy vessels in the program through to 2030” part because that is only a matter of making sure the supply chain works and we know everything is at the right place at the right time,” Nielsen says. In fact, he says the suppliers will be unchanged for both phases of the program. The main challenge was making sure the right competences were in place at both sides, Nielsen says. Luerssen Australia won the OPV contract in partnership with ASC for the first two ships and Civmec for ships three to twelve. ASC’s involvement ceases with delivery of the first two vessels.

“Part of the Australian shipbuilding strategy is of course to make sure the shipbuilding competence gets established here further to what’s already existing,” Nielsen says. “That’s our

task anyhow to make sure that we support the local industry, local SMEs as much as we can.” To that end, Luerssen through its tie-up with Civmec is eyeing future work building variants of the OPV for either the Australian Government or export defence markets. “We do believe we are very well positioned for other capability demands the Navy has in this type of class,” Nielsen says. “We also believe that this design and the product itself overall and its mission capabilities will also be attractive to other nations in the region, other navies.” Fitzgerald says while Civmec has a commitment to Luerssen, it could potentially work with other companies looking to use the facility: “It’s reasonably flexible, the deal. But the whole goal here is to make it work for Luerssen and have a sovereign shipbuilding business here so the designs are done here in Australia, in WA, and we build here as well. That’s the ultimate goal.”

A tale of two shipyards Operating across the two venues has obliged the shipbuilder to employ different construction methods because of the infrastructure available. In Osborne, Luerssen has built the OPVs in two halves, and then joined them on a hard stand outdoors, staying there until completion. “With the new facilities here we can do everything inside and we can follow a different build concept where we basically start with the entire keel and then basically like a Christmas tree we start to build up the ship,” Nielsen says. “That’s normally the way we prefer to do it.” He says the Australian content of the OPV build to date stood at 62 per cent for the first vessel. There is no difference in the proportion between the two build sites. “We still believe we can do a

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Defence lowdown All eye are on Australia’s submarine programs but there is plenty more happening, writes Stephen Bell

efence continues to be a hot topic for the supply chain, whether the pointed questions about the $50 billion future submarine program, the location of full cycle docking of the ageing Collins submarines, and Australian industry capability. Our selection of defence briefs kicks off with a look at an oft-overlooked aspect of the $4 billion offshore patrol vessel program that is now transferring to Henderson — how to sustain the 12 new Arafura class vessels once they are built.

Fresh OPV sustainment tender Defence has released a fresh tender for sustainment of the Navy’s new offshore patrol vessel fleet. Tenders are being sought for an “innovative sustainment model” for the Arafura class OPVs, the first of which are due to enter service late next year. According to Defence Industry Minister Melissa Price, the “Capability Life Cycle Manager” will provide specialist asset management services to support and sustain the Arafura class.

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She says the request for tender is the first part of a tailored maintenance strategy. “This will be a modern, innovative and highly-skilled sustainment plan to deliver a complex naval capability which is reliable, fit-for-purpose, and represents a new generation of naval operations,” Price says. “Establishing a skilled Australian industrial base with the capacity and skills to maintain our new fleet is key to building and maintaining a sovereign capability. “Australia’s regional small businesses will play a key role in delivering sovereign maritime sustainment to support the program.” Construction is well underway in Adelaide on two of the twelve Arafura class OPVs which are a part of the Morrison Government’s $90 billion naval shipbuilding program.  At the time of writing, the build program was due to transfer to Civmec’s new shipbuilding facility in Henderson, with construction slated to start in mid-year. Having ten of the vessels built by Prime

contractor Luerssen in the Australian Marine Complex south of Perth is expected to engender major sustainment opportunities for the WA supply chain once they go into service. Submissions for the Request for Tender are due to close on April 24. Further information is available at tenders.gov.au

Audit to build defence jobs The Morrison Government will establish an independent and “forensic” audit of Australian industry capability for the current round of major defence programs, Defence Industry Minister Melissa Price has told WA Works. The comments from Price followed the widespread publicity questioning French prime contractor Naval Group’s commitment to local content for the $50 billion future submarines program. In response to questions from WA Works, Price said the Morrison Government was taking Australian Industry Capability (AIC) in major defence programs “seriously”. “That’s why I recently announced the appointment of a head of AIC and that we will establish an Independent AIC Audit Program,” she said.

Defence Australian defence industries to build more jobs and a new generation of manufacturing here.”

Fight on for army dollars

Former banker and Treasury official Martin Halloran was appointed head of AIC earlier this year. Halloran’s role is a new position within Defence’s Capability Acquisition and Sustainment Group (CASG). He is tasked with delivering better outcomes for Australian industry at an “unprecedented time of investment”, according to Price. “This audit program will be a forensic assessment into the major contractors and hold them to account on their AIC obligations,” she said.

WA defence industry suppliers have the chance to get a slice of what has been described as the largest ever investment in new Australian Army capability — a $10 billion-plus program to build and support replacements for its infantry fighting vehicles. The Land 400 Phase 3 program involves Defence acquiring up to 450 of the IFVs to replace the old M113 armoured personnel carriers that have been in service since the 1960s. Germany’s Rheinmetall and South Korea’s Hanwha are competing for the prized contract and are now at the start of a two-year “risk mitigation” process ahead of a final Federal Government decision in 2022. Defence says it will use this time to work with the tenderers to maximise opportunities for Australian industry participation in the program. Central to the effort was an industry capability roadshow in March-April across all Australian capital cities and selected regional centres. The meetings, which were due to wrap up in April, aimed to provide local businesses the opportunity to meet both Hanwha and Rheinmetall concurrently. Ahead of the roadshow, Rheinmetall and Hanwha provided information on their respective capabilities and how they engage with industry. Hanwha’s local subsidiary says it has an Australian team in Korea working closely with the parent company on refining its procurement and qualification processes to create an “easier transition into our supply chain”. The roadshow was to feature the company’s RedBack IFV offering. Rheinmetall, meanwhile, is pitching its Lynx KF41 IFV to Defence, and says it’s committed to the creation of an “enduring Australian military vehicle ecosystem, expert in the manufacture of low volume, high quality,

“Largest ever investment in new Australian Army capability — a $10 billion-plus program” The audit is unrelated to the ongoing quarterly review of the submarine program for the rest of the year, starting in April, announced by the Defence Ministers of Australia and France, Price said. “I have also commissioned a review into the Centre for Defence Industry Capability (CDIC) to ensure it better meets the needs of small business in Australian industry,” Price says. “All these measures are about backing

high end, world renowned componentry”. The German company, which has a separate contract with Defence to deliver and support more than 200 Boxer combat reconnaissance vehicles, says it already has 1000 SMEs on its books. “An expansion of this industry network will be essential to meet the requisite capability requirements of Land 400 Phase 3,” it says. Hanwha and Rheinmetall were named as the shortlisted tenderers for Phase 3 last

September by Defence Minister Linda Reynolds, who said both vehicle offerings would provide “new levels of protection, firepower, mobility  and enhanced communications”. Defence Industry Minister Melissa Price, meanwhile, says the program will acquire and support up to 17 manoeuvre support vehicles alongside the 450 IVFs. “Australian industry will be absolutely critical to the success of this project.” “This is the time to highlight to Hanwha and Rheinmetall the strength and diversity of the Australian defence industry.” The Land 400 Phase 3 program is expected to run into the 2030s.

Perth role in Cocos airport job Fulton Hogan will set up a Perth office to run the early stages of Defence’s latest infrastructure project — the $184 million upgrade of Cocos/Keeling Islands Airport. The New Zealand company was announced as the winner of the design and build contract in February following a competitive tender by Defence last year. The project, expected to require a construction workforce of 80 at the remote tropical holiday spot in the Indian Ocean, will strengthen and widen the existing runway and hardstands. It will also provide new aeronautical ground lighting to support the RAAF’s new P8-A Poseidon surveillance aircraft, expected to enhance Australia’s maritime domain awareness of the Indian Ocean region and Southern Asia. The WA supply chain is expected to play an important role in the airport project as Perth is the closest Australian capital city to the island via a four-and-a-half-hour commercial flight. “Fulton Hogan will establish an office in Perth to manage the planning phase and design development activities for the project,” a Defence spokesperson told WA Works. “Subject to government and parliamentary project approval, which is anticipated in late 2020, the construction phase will be managed from Cocos/Keeling Island. “During construction, it is estimated that 75 per cent of the services and equipment will be sourced from the Australian Indian Ocean Territories, and Western Australia. The other remaining 25 per cent is likely to be sourced from within Australia. “Fulton Hogan will issue tenders to the subcontracting market for construction work packages aligned with the Government’s Defence Policy for Industry Participation, which seeks to maximise opportunities for Australian industry to supply goods and services for Commonwealth projects,” she says. Most tender packages are expected to be issued after project approval, with construction expected to begin mid-2021 and be completed by mid-2023.

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News Bites

Digging in We unearth the best tender awards, project progress and significant announcements over the last quarter.

January

Mid West gas expansion

Perth Airport plus Perkins

Perkins Builders was due to start work in March on building new aerobridges for Perth Airport’s Terminal 1 international gates. WA Works understands the job, scheduled to be completed by June 2021, will involve about 300 direct and indirect construction workers.

On the way up Perth’s next big inner-city construction project kicked off after the first sods were turned by Premier Mark McGowan, along with Multiplex and Brookfield officials, at Brookfield’s Chevron Tower at Elizabeth Quay. The $362 million build by Multiplex is forecast to generate 1200 construction jobs, with project completion due in mid-2023.

Mitsui has appointed engineering consultant Enscope to manage a Mid West gas plant expansion that is expected to generate about 50 local construction lobs. The Japanese conglomerate started site works for its Waitsia stage one expansion near Dongara. Expected to cost about $30 million, the project will double the capacity of the Xyris production facility to 20 terajoules (TJ) per day and connect it to the Dampier to Bunbury pipeline via a 4km lateral pipe.

Perenti is Panoramic

Fortescue’s Shanghai connection Fortescue Metals Group deepened its already strong ties to China by opening a new office in Shanghai, the country’s financial hub and biggest city. The office houses FMG Trading — established last year to supply products directly to Chinese customers in smaller volumes from regional ports — as well as supporting relationships with buyers, partners and suppliers.

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Mining services company Perenti said its Barminco underground mining division was selected as preferred contractor by Panoramic Resources’ Savannah nickel project in the Kimberley. Barminco’s scope of work for the $200 million job includes mine development, production, and haulage over a three-year term.

Pluto village build Woodside expected to start early works on a FIFO accommodation village for its Pluto Train 2 LNG project in March after the company received key approvals for the facility just before Christmas. The Gap Ridge village will accommodate up to 2,500 non-local Bechtel and subcontractor employees at peak construction of Pluto 2, supplementing the locally hired workforce, a Woodside spokesperson told WA Works.

News Bites LNG upside as Australia leaps Qatar

All aboard for Midland

WA is expected to boost liquefied natural gas production this year, further cementing Australia’s new status as the world’s largest LNG exporter. In sending overseas a record 77.5 million tonnes of locally produced LNG in calendar 2019, Australia edged out former number one export titleholder Qatar, estimated to have produced 75Mt in 2019, says independent energy consultancy EnergyQuest.

Construction of the new $160m Midland train station edged closer after the State Government unveiled more details of the long-discussed eastern suburbs project. Transport Minister Rita Saffioti said Midland’s current 51-year-old station would be replaced with a new facility between Helena and Cale streets.

Eliwana rail jobs ready to roll Fortescue is expected to hire up to 720 new workers in the next few months to build its Eliwana railway line after receiving final clearances from the State Government. Premier Mark McGowan, who visited Naval Base to inspect fabrication work on the major bridge girders for the $1.9 billion (US$1.25b) Eliwana project, granted a special rail licence to allow the iron ore miner to start hiring rail construction workers.

Rio Tinto win Mondium, the joint venture between Monadelphous and Lycopodium, won a $400m contract to design and build the key infrastructure for Rio Tinto’s $1.1b (US$759) Western Turner Syncline Phase 2 (WTS2) project. Managing Director Andrew Carnie says the award is a major strategic milestone for Mondium. “We are thrilled to be making great strides in our growth strategy and to have secured this significant contract with Rio Tinto,” he said.

$1.5b lithium project delayed

Taking the High Road Perth-based Georgiou started work on its latest road project — the $118 million Fremantle High Street upgrade. The upgrade, funded by the Federal ($73.6m) and State ($44.4m) Governments, is designed to improve safety along a 1.5km section of High Street between Carrington Street and Stirling Highway. The project is forecast to create about 700 jobs during construction.

WA’s much anticipated rebound in lithium construction activity remains some way off after one of the big new players, Wesfarmers, deferred a go-ahead for its half-owned Mt Holland project. It means that construction of the state’s third lithium hydroxide refinery — after Tianqi’s Kwinana and Albemarle’s Kemerton — won’t begin until the first quarter of next year at the earliest.

Clough’s gas win Clough won the engineering, procurement and construction contract to design and build Mitsui’s proposed $500 million gas plant near Dongara. The award is the latest sign that the giant Japanese conglomerate, alongside partner Beach Energy, are pushing to develop the Waitsia Stage 2 expansion, despite delays in finalising government approvals.

PTA rail maintenance win John Holland will be working on a timesensitive upgrade of Claremont station as part of its new $59 million maintenance contract — running over five years — with the Public Transport Authority.

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News Bites

February Sky high construction SRG Global’s stocks are soaring after the Perth contractor won a $72 million role on Multiplex’s Chevron Tower project at Elizabeth Quay. The integrated construction package includes the complete concrete structure as well as the design, supply and installation of engineered curtain wall facade for the 29-level project on the corner of The Esplanade and Barrack Street.

Contract win supports 1000 workers UGL will generate $450 million over “multiple years” after winning contracts to provide maintenance, turnarounds and project services for its oil and gas clients, including Chevron. The CIMIC Group-owned engineer said the contracts will deliver the extension of maintenance and turnaround services at the Chevron-operated Gorgon and Wheatstone facilities in the Pilbara. This activity supports ongoing employment for a skilled local workforce of up to 1000, it said.

Civic Heart gets a start Construction of Finbar’s Civic Heart project in South Perth is expected to kick off in October after the State Government approved the long-delayed twin tower development. The 8208 square metre triangular site, bounded by Mends Street, Mill Point Road, and Labouchere Road, will comprise two towers of 39 and 22 storeys respectively, providing 305 residential apartments, four penthouses, and 25 ground-floor commercial tenancies.

Oil and gas work heats up WA’s new oil and gas boom gathered pace, as energy giants Woodside and Santos starting supplier engagement via the Industry Capability Network for two separate projects off the Pilbara coast. Santos’s $2.2 billion Dorado offshore oil project listed on the CCI-managed ICN Gateway site, while Woodside started listing packages for its Pyxis offshore gas project, a key component of the company’s future production from Pluto LNG.

Three-horse race in Albany Construction of the $175 million Albany Ring Road project has turned into a three-horse race after a shortlisting process by Main Roads. BMD Constructions, CPB Contractors and Decmil were invited to submit design and construction proposals for the heavy haulage route around Albany. The State Government forecasts that up to 1000 jobs will be created during the construction phase — due to due to begin in late 2020.

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Another WTS2 winner WBHO Infrastructure is the latest winner at Rio Tinto’s $1.1 billion Western Turner Syncline phase two (WTS2) project near Tom Price, after securing a $50m role with EPC contractor Mondium. The job includes delivery of bulk earthworks package for a new crusher and 13-kilometer conveyor at WTS2.

Hospital demolition is huge The State Government called for expressions of interest from contractors to demolish and remediate the old Princess Margaret Hospital in Subiaco. The project, involving demolition works as well as landscaping and the construction of internal roads, was described as a “huge” task requiring hundreds of jobs by Planning Minister Rita Saffioti. A successful contractor is to be announced by mid-year.

News Bites

March On firm ground

Subiaco-based FIRM Construction has kicked off work on the new Bellevue railcar assembly facility, marking the start of the State Government’s plan to return railcar manufacturing to the Midland area. Premier Mark McGowan revealed the beginning of early works this week on the $46 million Bellevue factory, part of the $1.25 billion railcar construction and maintenance contract the McGowan Government signed late last year with France’s Alstom.

$309m price tag for high purity alumina WA is a step closer to a new battery metal industry after FYI Resources unveiled a $80 million financing deal with a European fund, alongside a definitive feasibility study for its high purity alumina (HPA) project. The junior outfit secured the funding package from Luxembourg’s GEM Global Yield fund ahead of a final investment decision on the project. FYI says it will need to spend about $309m (US$189m) building a project that would produce 8000 tonnes per year of HPA, with first production in the second quarter of 2022.

Gold mine mooted near Port Hedland  A Pilbara gold prospect is shaping as a potential supply chain opportunity after junior company De Grey Mining reported promising exploration results.  De Grey said reverse circulation drilling at its Mallina project, about 80 kilometres south of Port Hedland, confirmed a “large scale” gold system at the new Hemi prospect.  Exploration manager Phil Tornatora said the drilling to date showed “exceptionally wide, continuous and good grade” gold mineralisation.

New avenues for LNG work  Two initiatives designed to help small businesses share in billions of dollars of LNG work were launched at the AOG conference in Perth.  The State Government unveiled two-year LNG work plans, expected to give more small businesses a share of lucrative maintenance and sustainment work in the capital-intensive sector.  And the Industry Capability Network (ICN) also launched an updated report, “Opportunities for Australian Enterprises”, for companies interested in operations, maintenance and facilities management of Australian LNG plants.

Fiji gets WA-built patrol boat The Federal Government has handed over its latest Guardian Class patrol boat to another Pacific nation — in this instance Fiji. The boat, RFNS Savenaca, was received by Fiji Prime Minister Josaia Voreqe Bainimarama and other dignitaries at Austal’s Henderson shipyard. Austal is mid-way through a $335 million contract to build 21 of the Guardian vessels for the Federal Government.

Compiled from WA Works digital fortnightly newsletter. Your subscription entitles you to nominate 10 email address to receive the newsletter. Contact waworks@cciwa.com.au to add or update emails.

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Construction

Midland

on the move Initial progress was patchy, but now plenty is happening as the long-promised rejuvenation of the eastern suburb rolls on, writes Stephen Bell

he sometimes-derided revitalisation of central Midland — its Railway Square retail and residential development that opened in April 2017 was described as a ghost town a year later — seems to be back on track. The historic hub, which straddles the intersection of the Great Northern and Great Eastern Highways about 16 kilometres east of Perth’s CBD, has seen a spurt of new projects as a long-promised medical and education hub takes shape. And residents of the suburb, established in 1891 as a township soon after the formation of the Midland Railway Company, can look forward to further modernisation under plans to re-establish rail manufacturing after a 26-year drought. The initial stages, to be built over the next couple of years, will include a new $160 million Midland railway station that will be linked, by rail, to adjacent suburb Bellevue. The latter will house a modern railcar manufacturing and assembly workshop — a key step in the State Government’s Metronet railcars project. If heavy manufacturing is the future, healthcare and education is the here and now. A solid platform was established in November 2015 with the opening of the Multiplex-built St John of God hospital on Clayton Street. The $360 million public hospital was jointly

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funded by the State and Federal governments, while St John of God Health Care financed a co-located $70 million private hospital. St John says the hospital is contributing significantly to Aboriginal health, given that the east metropolitan region is home to about one quarter of all Aboriginal people in Perth.

Campus is in good health Last November, the focus of the health precinct shifted to the opening of a building designed to train future doctors — Curtin University’s new $22 million Midland campus. Designed by Lyons Architecture, built by PS Structures and funded by the State Government, the three-storey building will house Curtin medical students in their fourth and fifth year of study as well as other health sciences students. Curtin University Vice-Chancellor Deborah Terry says the structure will be an important base for Curtin’s students and “contribute to stimulating engagement, activation and economic growth in the Midland area”. The facility, totalling about 3000 square metres, features learning and teaching spaces, including immersive simulation-based environments for health science disciplines. A Curtin spokesperson says fourth year Bachelor of Medicine/Bachelor of Surgery students are the first cohort using the facility during clinical placement at the adjacent health facilities. >

Construction

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Construction

Curtin University’s new midland campus

> There is also scope for expansion if required. “The land has been developed to allow for a stage two, however there is no confirmed timeframe for this,” she told WA Works.

Parkerville arrives The recently finished first stage of Parkerville Children and Youth Care’s new child advocacy centre, built by Pindan, had now extended the health hub. The $25 million Stan & Jean Perron centre — only the second of its type in Australia — will allow for more children, young people and their families to access services in the treatment of trauma from abuse. The centre includes therapy consulting rooms, large family rooms, an occupational therapy treatment room, WA police facilities with specialist child interview rooms, reception area, meeting rooms, office space, gym, lunch room and balcony area for staff. It also features a lecture theatre with an LED screen set up on par with that used at RAC Arena. Pindan Group Business Development Manager James Allingame says preservation works to adjacent historic buildings was undertaken while construction of the new building took place. “We undertook important restoration work on the site next door, where two heritage-listed buildings lie, and the old weighbridge station, which is the last remaining timber structure in the precinct,” he says. The old tarpaulin workshop, meanwhile, needed a “completely new roof to avoid it degrading over time”. Moreover, the red brick façade of the new centre was chosen to complement the heritage buildings.

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The restoration was done in consultation with heritage architects, the former Metropolitan Redevelopment Authority (now part of Development WA), and the Heritage Council of Western Australia. “The tarpaulin building is ultimately set to be repurposed as offices and the weighbridge building will become a café and museum space as the next stage of the precinct unfolds,” Allingame says.

Parkerville Director Rob Wilton says Pindan performed well on the “complex” project, including handling the land acquisition, negotiating the project development and heritage agreement terms, and overseeing the design. The centre will also offer services by Ngala, Yokai, Raphael, Wanslea Family Services, the Department of Child Protection and the WA Police Force.

Green light for local rail work Midland is a big winner from one of the McGowan Government’s pet projects: the $1.25 billion acquisition of a fleet of new Metronet railcars, which will be partly built and assembled in the adjacent suburb of Bellevue. Construction of the 12,000 square metre Bellevue facility is due to start in the first half of this year, while assembly of the first railcars is slated to begin in 2021-22. Alstom is contracted to build and maintain 246 new C-series electric rail cars for the Public Transport Authority (PTA)’s metro network, along with six diesel cars to replace ageing railcars on the Australind route. The State Government has insisted that half of the railcars be “made in WA”, with a 50 per cent target applying to both Alstom and its suppliers. “Our experts and engineers across the globe will be here to support suppliers and our local workforce in terms of transferring the latest manufacturing technology and railway technologies in the building of the rail cars and also the maintenance,” says Dominic Clark, Alstom’s customer director Australia. “We will provide training and skills development to over 150 West Australians who will be working on the project.” Meanwhile, the business case for replacing Midland’s 51-year-old railway station with a new, relocated version costing $160m has been submitted to the Federal Government’s Infrastructure Australia. The new station will sit between Helena and Cale streets, bringing it closer to the centre of Midland, the health campus and the workshops precinct, Planning Minister Rita Saffioti says. The project definition is expected to be completed by the middle of this year, paving the way for procurement and construction. The project will be equally funded by the Federal and State governments.

Commodity Corner

Contrasting fortunes

A’s two most valuable export commodities, LNG and iron ore, were facing contrasting fortunes last month as the COVID-19 virus wreaked havoc on global markets. Iron ore was the bright spot in Australia’s commodity trade, as spot prices held firm in the face of the pandemic and expectations of a global recession. The steel-making commodity was trading at US$90 a tonne in the second half of March, little changed on its levels at the start of the year. Investment bank UBS said the market perceived iron ore to be “lower risk”, as it was driven more by domestic demand in China than other commodities.

earnings over a single year,” according to the Department of Industry, Science, Energy and Resources’ March quarterly report. Nearly all of Australia’s iron ore is produced in WA. Meanwhile, despite the unavoidable impact of COVID-19, Australia’s total resources and energy exports were expected to reach $299 billion in 2019–20, helped by bigger volumes and the fall in the value of the Australian dollar, the report said. The COVID-19 outbreak had shifted some commodity prices — notably, oil and base metals (down) and gold (up). “These shifts are expected to unwind by the second half of 2020 assuming China’s economy returns to normal by then.”

“The COVID-19 outbreak had shifted some commodity prices” “The Coronavirus outbreak there appears to be stabilising, the economy recovering and likely to soon benefit from infrastructure stimulus,” UBS analyst Glyn Lawcock said. Rival bank Credit Suisse also viewed iron ore favourably. “Port stocks continue to decline marginally and exporters are reporting logistics at the mills are 85-90% back to normal,” it said. “If any further supply disruptions come out of Brazil or Australia, this will only add to the current tightness.” The continued resilience is leading to surge in iron ore export revenue, “making it likely that in 2019–20, iron ore will be the first commodity to exceed $100 billion in export

LNG gloom

However, there is also a significant number of cargoes sold into the more volatile spot market. By the latter part of March, crude oil was trading at about US$20 a barrel, having lost two thirds of its value since the start of the year. Alongside the price crash, LNG producers were also facing lower shipment volumes due to the disruption in trade with China and Japan because of COVID-19 restrictions. In total Australian projects delivered 29 cargoes to China in February, well down on 40 in January although more than the 26 delivered in February 2019. However, cargoes delivered from Gladstone in Queensland fell from 17 a year ago to 14 in February this year. Further up the supply chain, 12 Australian cargoes destined for China were delayed or diverted in February, the report said. Australia’s utilisation of LNG capacity was also down in February due to the shutdown of Shell’s Prelude and “significantly reduced output” from the Woodside-operated North West Shelf joint venture.

In contrast to iron ore miners, oil and LNG producers were bracing for significant falls in revenues in coming months as pricing of LNG cargoes started aligning with the sharp declines in the price of crude oil. “Australian LNG is starting to experience a double-whammy of lower volumes and lower prices,” said Graeme Bethune, CEO of independent consultancy EnergyQuest. “The slump in the oil price will take two or three months to feed through to LNG price realisations but will have a significant impact,” he added in EnergyQuest’s monthly market report. Most of Australia’s LNG is sold under long-term contracts, which are indexed to the crude oil price.

Lithium hits rock bottom While much of the focus has been on the crude oil price crash in March, the fate of another key WA energy-related commodity — lithium — has gone virtually unnoticed, Because lithium has no transparent spot market, it is too soon to gauge what impact, if any, the COVID-19-driven disruptions have had on the battery metal. A few years ago, lithium was the wonder metal of WA after prices soared due to rising demand from new battery mega-factories in Asia dedicated to the electric vehicle market. But prices tanked last year as global supply ballooned and Chinese stocks soared, forcing the deferral or mothballing of several big WA projects. Judged by a report from Morgan Stanley, a resurgence in the commodity is still some way off. Preliminary February data shows the average price recorded by giant Chilean producer SQM fell 16 per cent on the previous month to US$7,500 per tonne, as (lithium) hydroxide “converges fast to Chinese levels and carbonate still falls”, Morgan Stanley analysts said in a research note. “We believe Chinese lithium prices have hit the bottom, with carbonate at US$6000 a tonne, and believe the downside going forward is limited. “Yet, we do not expect a recovery to start in 2020, as industry inventories will still be high (maybe 2021?).” Talison Lithium’s Greenbushes mine in the South West is the world’s single biggest lithium mine and has plans for further expansions once the market improves.

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Infrastructure

A hundred years of fine tuning R. Moore & Sons has turned the recycling of wornout engines into an art form, one that has enabled the local outfit to keep on trucking for a century By Stephen Bell

ixing old engines is not something you’d necessarily associate with one of the key social and corporate trends of this century — looking after the environment. But, tucked away in a non-descript Kewdale street close to the airport, family-owned R. Moore and Sons (RMS) is living proof that some of Perth’s “greenest” companies can be found in the most unlikely of guises. Founded by Irish migrant Robert Moore a hundred years ago, RMS is now one of only a handful of independent companies globally able to effectively regenerate diesel engine

56 WA WORKS Autumn 2020

components, reducing costs and environmental impacts. “Basically, we’re a recycler,” explains RMS general manager Stuart Davis during an exclusive tour of the company’s bustling workshop. “Our environmental supply to industry is quite significant — the consumption and the power required to produce a new item, such as casting a new engine block, is massive versus the remanufacturing of it.” Moreover, it enables big industries like mining to do the repairs in WA, rather than racking up the extra costs and carbon emissions from shipping the degraded engines offshore and then importing back the finished product.

“Those emissions are huge,” he says. “And if we complete it here in our own state, with our own people and supporting our own industry, it becomes vibrant and sustainable.” Many of those people are young trainees — the company employs 65 people and seven of them are apprentices. Alongside mining, oil and gas is a large part of the business. In particular, the company does plenty of work on gas engines. “As far as what we do here, gas is no different from diesel when you are talking about large commercial engines, whether that’s power generation or other applications such as gas compression,” Davis says Aside from mining, RMS’s food chain includes original equipment manufacturers (OEMs), contractors and major repairers. It is also a member of the Henderson Alliance as part of its effort to source more work from Defence. The scruffy, pitted engines that arrive from across Australia and even overseas are often more than a decade old, having provided hard service in unforgiving environments. “Some of these items can be looked at as being at the end of their engine life, but they can be remanufactured for another life, and another one after that,” he says. To perform this feat, RMS regenerates the equipment by spraying molten metal

Infrastructure

Workers inside R.Moore & Sons Kewdale factory. Photos: Graz Prinsloo

onto the worn or corroded areas, which is built up and then machined precisely using computer-controlled equipment. “This repair that we carry out is better than the original material that the block is manufactured from and it is helping to extend engine life, which is critical in industry,” he says. The combined efforts of the OEMs, repairers, operators and owners, and specialist machinists such as RMS have helped increase the longevity of diesel equipment significantly.

massive change is as far as efficiencies and emissions go — they’re the two big drivers of the diesel engine.” And the computer systems to control them are now racing as “fast as any technology,” Davis says. Therefore, RMS’s premises include rooms dedicated to the assembly and testing of fuel pumps, fuel injectors and turbos. “There are many moving parts and very fine tolerances, so the cleanliness and precision of this work is fundamental to its success,” he says.

“This repair that we carry out is better than the original material that the block is manufactured from” “Those engine lives are 25 to 30 per cent longer than what they were ten years ago,” he says. Yet the fundamentals of diesel motors — Frenchman Rudolf Diesel began developing the compression ignition technology in 1885 — haven’t altered a great deal. “Even in the last 50 years, the blocks, the heads, the cranks, all the major componentry hasn’t changed much,” Davis says. “However, the fuel injection side of things is where the

by brother Warren. The pair purchased the family business in 1988 but, with the fourth generation focused on other careers, the future is very much in the hands of Neil, Warren and Stuart Davis, along with their management team who have equity in the business. Despite a century in the game, the team is taking nothing for granted. “Our culture is about continuous learning,” Davis says. “We regularly travel overseas to explore new technologies, keep on top of what’s happening in the large heavy industry market, particularly with diesel and gas engines, and network with similar independent organisations to share ideas.”

This type of work is an example of RMS’s forward-thinking, according to Davis, who’s been with the organisation since 1991, starting as a leading hand then progressing up the ranks until he was appointed general manager in 2005. Although its eyes are fixed on where it’s going — the company is now ramping up a “truly lean” workshop improvement program — RMS retains strong links to the past. Neil Moore remains Chairman, supported

Autumn 2020 WA WORKS 57

Pilbara airport upgrade takes off One of the Pilbara’s busiest airports is preparing for growth in traffic, writes Stephen Bell

ort Hedland International Airport is spending more than $40 million on upgrades as it gears up for more mining-driven economic activity in the Pilbara. The latest project, a $25 million expansion and modernisation of the passenger terminal and car park area, began in February under the guidance of project manager NS Group and head construction contractor ADCO. The municipal airport is owned by the Town of Port Hedland but managed by AMP Capital and Infrastructure Capital Group, who

58 WA WORKS Autumn 2020

acquired a 50-year lease in 2015. Designed by architects Woods Bagot, the new terminal will be about 800 square metres larger than the existing facility that was built in the 1970s. Completion of the terminal project is due for the second quarter of next year, with construction to be undertaken in a “live” airport environment. Flexibility and future growth options were key considerations for the design team, according to NS Group senior project manager Jeff Gidman. One of the early tasks will be to wall off

the western side of the airport where the car hire booths sit. “Once we’ve finished there won’t be any car hire booths inside the terminal — they’ll have their own facilities outside,” he told more than a hundred key stakeholders at a recent information session in Perth. The Woods Bagot design features four separate buildings — one for each hire company. Meanwhile, interior terminal works will include major upgrades to the domestic terminal, including a new security area, expanded departures area, and a refurbished café. About 400,000 passengers per year pass through the airport, which offers 50 commercial flights per week direct to

Perth, Bali and Brisbane. PHIA chairman Cheryl Edwardes said the terminal expansion would deliver an airport which had the “ongoing capacity to service the burgeoning mining interests, oil and gas industry and other opportunities in the region.” The current works follow $18m worth of infrastructure upgrades — including an asphalt overlay of the main runway and a new taxiway — completed last year. Extension of the general aviation apron was also completed, which facilitates safe operation of the Royal Flying Doctor Service’s new PC-24 aircraft. PHIA General Manager Rod Evans said the work delivered more flexibility to the airport by providing a dual access taxiway system from the apron. “This new paving is capable of taking most-size aircraft,” he said. In the meantime, PHIA would continue to invest in infrastructure to build a bulk haulage “precinct” of laydown yards, roadhouses and truck washing facilities. Evans nominated “oversized freight” as another potential growth area.

Horse sense Port Hedland International Airport has one of the more deep and colourful histories of WA regional airports. The airport started operations in the early decades of last century using the racecourse aerodrome before moving to its current location in the early 1940s. It has a long aviation tradition with pioneers such as such as Sir Charles Kingsford Smith piloting the famous outback ‘Milk Run’, which began in the early 1920s. These regular flights from Geraldton to Derby serviced Carnarvon, Onslow, Roebourne, Port Hedland and Broome, and covered 1900 kilometres using Bristol Tourer biplanes. They were “vital links to stations, providing mail, food and easier transport for expecting mothers and children in those early days,” said Rod Evans, general manager of PHIA. The airport also became entangled in World War Two after Japanese forces began bombing targets on the Australian mainland. On the 30th of July 1942, all three runways were hit during an air raid, “pitting them with craters and fatally wounding private John Adams who was 19 years of age,” Evans said. The shape and size of the airport has changed dramatically over the years. In the pioneering days, there was a “spinifex hut” to welcome locals, Evans said. It was replaced by a terminal building in the in the mid-50s, which was followed by a “glamourous” cement and glass airconditioned structure in 1971. That building was extended in the 90s to include the international area, and further extended in 19992000 period to include the modern arrivals area. “The 1970s renovated building is at the end of life after serving the community well,” Evans said. “The control tower at the airport was built in 1974. “For those that don’t know, it hasn’t been in use for over 20 years. The runways were extensively rebuilt and expanded in the early 80s which is the runway configuration we have now. International status was claimed in 1986, with the first flights to Bali, which are maintained today.

Autumn 2020 WA WORKS 59

The Big Picture Civmecâ&#x20AC;&#x2122;s new 70-metre-high workshop towers over the Henderson waterfront and dwarfs what are in fact the sizeable adjoining buildings. Later this year, the Navyâ&#x20AC;&#x2122;s $3.6 billion offshore patrol vessel program will transfer from South Australia to the new facility. Such is the size of the shed, the Luerssen-run OPV program, in which up to three vessels will be under construction at one time, will only take up 40 per cent of the available space.

60 WA WORKS Autumn 2020

Autumn 2020 WA WORKS 61

North West Shelf Perseus North Rankin Goodwyn Rankin Dockrell

Chandon

Jansz–Io Scarborough

Pluto

Major Resource Projects

Hermes Lambert Angel Cossack Wanaea

Athena

March 2020 Project labels:

Pemberton

Iago

Major mineral and petroleum projects operating and under development are shown in blue

Reindeer

Xena Brunello Chrysaor/Dionysus Julimar See West Tryal Rocks Barrow Island Achilles Clio enlargement Gorgon Satyr

Proposed and potential major projects are shown in red

Wandoo

Mineral projects under care and maintenance and petroleum projects that are shut-in are shown in purple

Stag Ammonia/Urea NWSV LNG Yara Pilbara Fertilisers Pluto LNG Yara Pilbara Nitrates Anketell

Dampier

Halyard

Dampier Salt

Cape Preston

Cape Preston East Cape Lambert Devil Creek Gas Eramurra Salt Maitland River Radio Hill Plant Sino Iron Whundo Zn Cu Balmoral South

Torosa Brecknock

Prelude Ichthys

Cape Bougainville

Blacktip

Calliance

Mardie Salt K Coniston Novara Vincent Stickle Moondyne Enfield Laverda Macedon Ravensworth Crosby

Ashburton North

Cape Range Lst

10 km

Onslow

Tubridgi Gas Storage

100

14 Dorado

SOD

Oil

PROPOSED -19.0336 118.7338WA-437-P Quadrant

Dorado 1

Excellent

Quadrant

R Bruce 23/8/18

Announced 7/2018

Kilometres

Ag........... Silver Al............ Alumina Au........... Gold Co........... Cobalt Cu........... Copper Dmd........ Diamond Fe........... Iron Fl............ Fluorite Gp........... Gypsum Gr............ Graphite Grt........... Garnet K............. Potassium Kln.......... Kaolin Li............. Lithium Lst........... Limestone LNG........ Liquefied natural gas Mag......... Magnetite Mn.......... Manganese Nb........... Niobium Ni............ Nickel Pb........... Lead Pd........... Palladium PGE........ Platinum group elements Pt............ Platinum REE........ Rare earth elements Ta............ Tantalum Ti............ Titanium V............. Vanadium W............ Tungsten Zn........... Zinc Zr............ Zirconium

Mineral symbols

Precious mineral

Broome

Savannah North Savannah McIntosh Gr Copernicus Panton Pt Pd

India Bore

Ungani

Duchess–Paradise Pillara Zn Pb

Nicolsons Kapok West Pb Zn Ag

HALLS CREEK Brockman REE Nb Zr

Browns Range REE

Admiral Bay Zn Pb

Port Hedland

Cummins Range REE

Asian Renewable Energy Hub wind & solar Winu Woodie Woodie Mn

Citadel Au Cu Minyari–WACA Au Cu Co Telfer Au Cu O'Callaghans W Cu Zn Pb

Nifty Cu

Maroochydore Cu Co Kintyre Lake Mackay K

Nicholas Downs Mn

See North West Shelf enlargement

Lake Disappointment K See Pilbara enlargement

Yangibana REE Cape Cuvier

Butcherbird Mn

Lake MacLeod Gp Lake MacLeod Salt

Glenburgh Yalbra Gr

Shark Bay Salt Coburn

Au (or as shown)

Steel alloy metal

Ni (or as shown)

Speciality metal

Port Gregory Grt

All sites are bauxite

Balline Grt

Geraldton

Ilgarari Cu

Abra Pb Cu Zn

CARNARVON !

Precious metal

Ti–Zr (or as shown)

Thunderbird

Dorado

Dmd

Base metal Iron Alumina

Ord River Hydro Energy Speewah V Ti Fe Al Speewah Fl Smoke Creek Matsu Argyle

Derby

Browse LNG Precinct

Paulsens

Commodities

Ord–Mantinea Flats Ord Stage 1 ! KUNUNURRA

Cockatoo Island Irvine Island Koolan Island

Wonnich Wonnich Deep

Bambra Linda Lee Rose Harriet Monty Josephine Baker Ginger Agincourt Simpson Barrow I South Plato Little Sandy Pedirka Victoria Gorgon LNG Barrow Island West Cycad

Onslow Salt Wheatstone LNG Macedon Gas

Ashburton Salt

Exmouth

Sorby Hills Pb Zn Cu Ord Stage 2

Wyndham

Barrow Island

Beyondie K

Plutonic Dome Horseshoe Lights Cu Au Ag Plutonic Fortnum Hermes Thaduna Cu Ag Telecom Hill DeGrussa Monty Cu Au Cu Au Jack Hills

Wiluna Jundee–Nimary Paroo Station Pb Meekatharra Wiluna/Toro Matilda Parks Reef PGE Au Gabanintha/TM V Ti Wiluna Lake Way K Weld Range Honeymoon Well West Yeelirrie Mt Keith Cue JV – Hollandaire Cu Au Ag Australian Vanadium Kathleen Valley Li Ta V Ti Gidgee Cliffs Big Bell Barrambie Bronzewing Yakabindie V Ti Fe South Fingall Comet Dalgaranga Mt Magnet Yogi Mag Windimurra V Fe Youanmi V Ti Kirkalocka

Coal and lignite Uranium Industrial mineral Processing plant

Succoth Cu PGE West Musgrave

Wingellina Tollu Cu

Lake Wells K / Salt Lake Potash Lake Wells K / Australian Potash

Gruyere

Cyclone Tropicana

Mulga Rock

Petroleum symbols

Gas Oil Oil and gas Processing plant Oil / gas pipeline, operating Oil / gas pipeline, proposed

Edna May

PERTH Fremantle

Wickepin Kln

Cosmic Boy Concentrator

See Goldfields enlargement

Bunbury Katanning Mt Cattlin Li Ta Great Southern Au Cu

Ravensthorpe Munglinup Gr Springdale Gr

Esperance

See South West / Mid West Coastal enlargement

Enquiries for latest information for Commonwealth controlled waters is available from the National 62 WA WORKS Autumn (NOPTA) 2020 Offshore Petroleum Titles Administrator at <info@nopta.gov.au>

EUCLA !

Tampia

Infrastructure

Power plant Irrigation / water / desalination Port

Silver Knight Nova–Bollinger

Collgar wind

Southdown Mindijup Albany & Grasmere wind

Albany

Scaddan

100

200

Kilometres

300

400

Major Resource Projects March 2020

Reindeer Port Hedland Salt

Wandoo

Port Hedland

Stag Ammonia/Urea Yara Pilbara Fertilisers Yara Pilbara Nitrates

Dampier

Dampier Salt

Cape Preston Eramurra Salt Sino Iron

NWSV LNG Pluto LNG

Cape Preston East Devil Creek Gas Maitland River

Cape Lambert Anketell Cape Lambert

Mineral symbols

Balla Balla Balla Balla Fe V Ti

Sherlock Bay

Whim Creek Cu Pilgangoora/Altura

Radio Hill Plant

Pilgangoora/Pilbara

Whundo Zn Cu

Balmoral South

Wodgina Li

Spinifex Ridge Mo Cu

Miralga Creek

Speciality metal

McPhee Creek

PANNAWONICA Pilbara Energy Transmission Line

PIOP/Flinders

Serenity

Paulsens

Beasley River Rocklea CID

Marandoo

Oil / gas pipeline, operating Oil / gas pipeline, proposed

Roy Hill

Koodaideri

Marillana

Extension Nyidinghu Yandi/BHPB Iron Valley Yandicoogina/HI Hope Downs 1 Mining Area C Jinidi South Flank Rhodes Ridge

Infrastructure

Power plant Irrigation / water / desalination Port

Ophthalmia Hope Downs 4 Mt Newman 24-25 Wheelarra Mt Whaleback ! Davidson Creek NEWMAN Mt Newman 29, 30, 35 Mt Newman 18 Jimblebar Coobina Cr

Wonmunna West Angelas

PARABURDOO Turee Syncline ! Western Range Eastern Range Paraburdoo Channar

Pilbara 100

Robertson Range

Kilometres

Prairie Downs Zn Pb Ag

Oakajee

Major mineral and petroleum projects operating and under development are shown in blue Proposed and potential major projects are shown in red

Deflector Au Cu Ag Golden Grove Cu Zn Pb

Mineral separation

Narngulu synthetic rutile Alinta–Walkaway wind Mumbida wind

Shine Golden Dragon

Greenough River solar

Mineral projects on care and maintenance and petroleum projects that are shut-in are shown in purple

Mungada East Extension Mt Mulgine W Mo

Irwin River

Centauri 1 Dongara Waitsia Xyris South Mondarra gas storage Jingemia West Erregulla 2 Tarantula Cliff Head Dongara Redback Beharra Springs Eneabba/Sheffield

Enquiries for latest information for Commonwealth controlled waters is available from the National Offshore Petroleum Titles Administrator (NOPTA) at <info@nopta.gov.au>

Karlawinda

Project labels:

South West / Mid West Coastal Geraldton

Christmas Creek

Cloud Break

Hardey

Gas Oil Oil and gas Processing plant

Mesa – Ant Hill Mn

Kings

Western Turner Syncline ! TOM PRICE Tom Price

Brockman 4

Coal and lignite Industrial mineral Processing plant

Petroleum symbols

Mulga Downs

Nammuldi Eliwana

All sites are bauxite

Nullagine

Silvergrass

West Pilbara

Base metal Iron Alumina

Nullagine CID

Investigator

Weelumurra Firetail

Ti–Zr (or as shown)

Big Hill W

Mesa J Mesa A – Warramboo

Ni (or as shown)

Corunna Downs

Mt Webber

Caliwingina

Ag........... Silver Al........... Alumina Au........... Gold Cr............ Chromium Cs........... Cesium Cu........... Copper Fe........... Iron K............. Potassium Kln.......... Kaolin Li............. Lithium LNG........ Liquefied natural gas LPG........ Liquefied petroleum gas Mag........ Magnetite Mn.......... Manganese Mo.......... Molybdenum Ni............ Nickel Pb........... Lead Phos....... Phosphate REE........ Rare earth elements Sisd......... Silica sand Sn........... Tin Ta............ Tantalum Ti............ Titanium Tlc........... Talc V............. Vanadium W............ Tungsten Zn........... Zinc Zr............ Zirconium

Steel alloy metal

Sulphur Springs Zn Cu Pb ! MARBLE BAR Iron Bridge Mag Warrawoona

Mardie Salt K

Bungaroo Creek Bungaroo South

Commodities

Precious metal

Au (or as shown)

Karara Mag

Oxley K

Rothsay Magnetite Range

Three Springs Tlc

Goldfields 50

Extension Hill Mag

Odysseus Bellevue Leinster

100

Darlot

Vivien

Lawlers Agnew–Emu

Kilometres

Moolart Well

Rosie

Garden Well & Rosemont

Ben Hur – Epsilon

Thunderbox

Eneabba/Iluka Warradarge wind

Bentley Zn Pb Cu Mt Forrest JURIEN BAY ! Badgingarra wind

Dandaragan K Phos

Emu Downs wind and solar Atlas Cooljarloo

Moora Silica Waddi wind Yandin wind

Neerabup/Newgen

Kilometres

Lake Carey

Darling Range Lake Giles

Deception

Chandala mineral separation and synthetic rutile NORTHAM Meckering/Dana Kln Felicitas ! Wesbeam timber Fortuna Meckering/Altech Kln Gnangara Sisd

Windarling

Davyhurst

Marda Sandy Ridge Kln

Carina

Lake Deborah Salt Keysbrook Huntly

Pinjarra Alumina Boddington Au Cu Marradong Willowdale

Koolyanobbing

Athena Corinthia !

Boddington

Kemerton Sisd Titanium pigment Worsley Alumina Bunbury ! Bluewaters 1-2 CollieEwington Cristal mineral separation Doral mineral Premier Wesfi timber separation Muja Capel North synthetic rutile Wespine timber Wonnerup North Tutunup Wonnerup South Yalyalup Yoongarillup 100 Ta Greenbushes Li Ta Sn

SOUTHERN CROSS Marvel Loch

Comet Vale Goongarrie Scotia Bardoc Ora Banda

Anglo Saxon–Trouser Legs Karari Black Swan

Paddington

Lindsays

Pinnacles

Atlas–Kalpini Gordon–Sirdar

Kanowna Belle Millennium Castle Hill Bombora – Lake Roe KALGOORLIE–BOULDER Jaurdi Kundana Superpit ! Frogs Leg Boorara Ag Au Zn White Foil Lithium Refinery Geko Nickel smelter Blair COOLGARDIE ! Coolgardie South Kal Bullabulling Mt Monger Aldiss Burbanks Randalls Carnilya Hill Mt Marion Li Ta Nepean Long–Victor Beta Hunt Nickel concentrator St Ives Widgiemooltha The Mount

Nevoria

Southern Seawater desalination Lithium hydroxide Silicon smelter Chlor alkali

Sunrise Dam Red October

Ulysses

Second Fortune

Fremantle Henderson Graphite

Wagerup Alumina

Burtville Mt Weld Phos Mt Weld REE

Murrin Murrin

Mt Mason Mt Ida

Calingiri Cu Mo Ag Au

Mt Jackson

PERTH

Wallaby

Deep South

Boonanarring

NiWest

Sons of Gwalia Mt Bevan

Cadoux Kln Al

Yerecoin

Alumina refinery Ammonium nitrate Cement and lime Chlor alkali Desalination Fused zirconia Kwinana HPA Lithium hydroxide LNG LPG Nickel refinery Nickel sulfate Oil refinery Power plant Sodium cyanide Titanium pigment Zirconia

Mt Morgans

Leonora/Kin LEONORA

Cashmere Downs

Cataby

Kwinana–Rockingham

Windarra

King of the Hills

Lanfranchi Miitel Mariners

Bald Hill Li Ta

Polar Bear Pioneer Dome Li Cs Blue Vein – Mt Holland

Earl Grey Li

Mt Thirsty Lake Johnston

Flat Rock wind New Morning

Flying Fox Spotted Quoll

NORSEMAN

Mt Henry Autumn 2020 WA WORKS 63

Tech Talk

Tech talk WA Works goes on the technology trail for the latest and greatest advances and announcements that will help drive the state’s future

Collie gets autonomous training hub

ollie will become home to the southern hemisphere’s first Caterpillar autonomous technology training facility, with hundreds of people expected to visit the South West town each year to use it. The McGowan Government, which delivered $2.7 million from the $20m Collie Futures Fund to help establish the learning hub, said it is expected to train about 200 students during the first year of operation. It is projected to grow to 320 students in its third year, delivering training courses to technicians and operators of autonomous equipment and to support the growth of this technology in mining. Local Caterpillar dealer WesTrac said it would build the facility on land owned by Bluewaters Farm Holdings in Collie’s Coolangatta Industrial Estate. WesTrac CEO Jarvas Croome said the investment included a new autonomous Caterpillar 789D off-highway truck, construction of an autonomous operations zone and training room facilities. Local contractor Piacentini & Son would

64 WA WORKS Autumn 2020

carry out the earthworks and installation of key infrastructure, with training scheduled to begin in May, he said. “The initial focus will be to provide training in fit-out and maintenance requirements for the conversion and operation of existing Caterpillar haulage vehicles,” Croome said. “Over time, we anticipate expanding the range of courses on offer to ensure the facility caters for the recognised skills of the future that will be in demand as the resource sector evolves. “It’s an opportunity to position Collie and Western Australia as a world leader in advanced technology and skills development in automation and autonomous operations.” Croome said WesTrac and Caterpillar clients across the Asia Pacific region had shown significant interest in having access to such training and strong demand was expected when the facility started classes. The traditional home of WA’s coal industry, Collie is attempting to diversify its economy as coal-fired power generation steadily winds down and renewables ramp up.

NZ robot to sample Koodaideri The New Zealand engineering company contracted to build an automated sampling laboratory for Rio Tinto’s Koodaideri iron ore project says its Perth office will double in size to cater for WA mining growth. Dunedin-based Scott Technology, which was awarded the “multi-million dollar” Rio contract in February, already has a sales, spares and service office in the Perth suburb of Malaga, focused on supporting its Rocklabs sample preparation equipment clients across WA. “This team currently fluctuates between 6-10 personnel, and we expect to at least double in capacity over the next 12 months to cater to current and upcoming projects,” said Steve Russell, Scott’s Director of Mining. Up to 30 construction workers would also be required at Koodaideri, with about a dozen engineers and specialist technicians remaining at site during installation and commissioning, he said. Rio Tinto started building its $3.9 billion Koodaideri Phase 1 mine in the Pilbara early last year. Once in production, the mine will have an annual capacity of 43 million tonnes per annum, with a requirement to process 600 pit samples and 24 production samples each 24 hours, according to Scott, which aims to complete the installation in mid-2021. Russell told WA Works that “significant portions” of the laboratory project scope would be subcontracted to Perth and Pilbara-based businesses. The building construction, building services, and some of the laboratory equipment will be “built and supplied in WA,” he said. “There will be local employment and engagement for site-based activities including construction, installation and commissioning. “Extensive consultation is already underway with specialised building and analytical equipment contractors. “Detailed specifications will shortly be finalised for other equipment and services, to be then put out for expressions of interest from local sub-contractors,” Russell said. The finished laboratory would incorporate recent advancements in automation and digitisation, meaning there would be no requirement for manual handling, he said. This should eliminate the health and safety challenges from lifting, fatigue and dust exposure.

Echidna Tales A fascinating bush yarn was delivered recently to WA Works’ offices by snail mail, handwritten, no less, by quill pen. Once the bona fides of The Echidna were established, it was agreed the pointed observations should be shared

A year of living dangerously

his year looked like it was going to be ‘steady as she

to see the idea being ridiculed. The proud Black Swan says

goes’. But the wise Owl was cautious, reminding us to

Western Australia can do better than that. We have already been

always expect the unexpected.

told that elephants will not continue for much longer at the

First the east coast bushfires and now the coronavirus.

existing Perth Zoo. Animals want to live in a natural environment

No one to blame, sometimes stuff just happens. This year is now

and we want your children and grandchildren to be able to see us

one to survive.

in that environment.

The bushfires

As for the coronavirus, it is first and foremost a health issue.

came with a tragic

China deserves credit for its ‘tough love’ measures to contain

loss of human

the outbreak. Other countries now face the same challenge.

life and property.

In Australia, governments and health workers are doing

We animals also

all they can and deserve our support. It also helps with

suffered with tens

Australia being an island. The Sharks have even offered

of thousands of our

to help out with border patrols.

brothers and sisters perishing, including over 5,000 Koalas in New South Wales

The economic impact is now being compared to the global financial crisis of 2008. However, that was a banking collapse around the world. The smart Emu points out that for Australia, it was a government guarantee of bank deposits which saved the

alone. Small and

day. This time around, with interest rates already at a record low,

slow animals,

the Reserve Bank has run out cards to play. The falls and instability

like Echidnas, had

on the stock exchange are similar with both crises being preceded

no chance. In some

by an over-priced market.

areas there is doubt as

What also worked in 2008 was a school building program in

to whether local animal

every town and suburb. For Western Australia, in particular, it was

populations will ever recover. Rare

a quick and effective measure. This time, a boost in public housing

plant species are also at risk.

construction might achieve the same. The big infrastructure

We think you people could do much more to protect threatened animals through the better management of parks and conservation

projects are good, but they just take a long time to get underway. Those businesses most dependent on travel and trade have been

areas. We have just seen the consequences of this in the bushfires.

directly impacted by the coronavirus emergency. For most others

It is also a global issue with many less developed countries

it is all about the loss of confidence. Both consumer spending and

struggling to preserve both habitats and the animals who live there.

business investment are likely to remain fragile until the spread of

A few years ago, the idea of an open range zoo for conservation

the coronavirus begins to subside. Hopefully that won’t be too far

and breeding was proposed. A beautiful site, surrounded by

away. In the meantime, it is a matter of riding it out and protecting

Jarrah forest was found close to Perth. The site was suitable for

what you have worked for. It is going to be a tough year, but we will

both native animals and those at risk in Asia and Africa.

get through it.

We animals supported the idea and understood that it would take several years to get underway. But we were disappointed

THE ECHIDNA, March 2020

Autumn 2020 WA WORKS 65

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