WA Works Winter 2019

SU

Supply Chain and Major Project News

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

Winter 2019

Rail bots

Tech savvy miner attracts global interest Defence

Resources

Infrastructure

Henderson in the hot seat

Rare earths Exclusive report

Perth alights for big bus deal

News, Profiles, Major Projects List, Opinion and more Winter 2019 WA WORKS 1

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Contents

Cover Story

24 Rio Tinto’s autonomous rail locomotive.

Photograph - Tom Rovis-Hermann

12

Rare earth works

?

42

Henderson in hot seat

Winter 2019

CEO’s Desk

5

Economic outlook

8

Premier’s Memo

9

A day in the life - Multiplex’s Serisha Sookrasj

10

Magnetite attraction

20

Talison’s Tails

22

Biggest bus deal

26

Road and rail blitz

28

Engineer’s Memo - Paul Young

31

Full stream ahead - Urea plant

34

Making waves in defence

36

Major Projects List

40

Perfect storm for defence work

43

Three naval ships

46

Infrastructure Australia - Romilly Madew

48

Batteries powering on

52

Clearer path to LNG work

53

Policy Corner - Local Jobs Bill

54

Digging In - Notable news bites

56

Commodity Corner - BHP’s favourites

62

If you employ workers in the construction industry you may be required by law to register in the Construction Industry Long Service Leave Scheme.

Done and dusted

66

Find out by visiting www.myleave.wa.gov.au or by calling 08 9476 5400.

The Echidna

68

It’s your business to register.

Winter 2019 WA WORKS 3

Welcome

Editor’s Letter

Interest in WA’s rare earths amps up

W

elcome to WA Works, the magazine that aims to blast away winter’s chill with a truckload of hot features and information tailor-made for the supply chain.

For this issue, we’ve cast our gaze far and wide to get a grip on the sometimes murky world of rare earth elements, which are becoming increasingly important to our daily lives via their usage in consumer electronics, robotics, electric vehicles and many defence applications.

During the compilation of our special eight-page report, starting page 13, rare earths become front-page global news as trade tensions heightened between the US, a major consumer, and China, the dominant producer.

Our feature offers rare insights into where the supply chain opportunities are arising, while US Ambassador Arthur Culvahouse adds the geopolitical background.

Continuing on the high-tech theme, our cover story enables you to get up close and personal with an army of giant Pilbara robots spawned from Rio Tinto’s $1.4 billion Autohaul project.

WA Works attended the official opening of this WA triumph — it enables Rio’s fleet of rail bots to haul one million tonnes of ore each day with no humans in sight — is attracting global interest.

Iron ore generally is still running hot, with new entries on our major projects list dominated by projects such as Fortescue’s $3.8b Iron Bridge magnetite venture.

We estimate there is now about $16b of iron ore construction either underway or approved in the Pilbara as the majors look to replace production or target higher grade products.

With all this mining activity, it is sometimes easy to forget that WA retains a world-class manufacturing sector.

One shining example is Malga-based Volgren, which is gearing up for a $549 million bus building job for the Public Transport Authority.

From October, the company will be churning out the first of 900 vehicles under a 10-year deal, the biggest single bus contract in Australian history. See page 26 to appreciate the logistical wizardry behind the feat.

Defence, meanwhile, is in the spotlight following the Federal election. The returned Morrison Government has already reaffirmed its commitment to spend $1 billion building three naval supply ships at Henderson starting from early next decade.

In the meantime, State Defence Issues Minister Paul Papalia is putting the finishing touches on his long-term infrastructure plan for the Australian Marine Complex, seen as a key pathway to securing more naval sustainment work.

And don’t forget to read our exclusive feature on Perdaman Chemicals (page 34) as Chairman Vikas Rambal outlines his vision for building one of the world’s biggest urea manufacturing plant in the Pilbara from next year.

Stephen Bell

We hope you enjoy reading WA Works as much as we do producing it.

Share your thoughts at editor@cciwa.com

4 WA WORKS Winter 2019

Visit cciwa.com/waworks

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 Ray Sputore Chief Executive Officer Chris Rodwell Editor Stephen Bell (08) 9365 7445 editor@cciwa.com Production Editor Robyn Molloy (08) 9365 7628 Robyn.Molloy@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 June 2019. CCI has taken all reasonable care in preparing this information, however, it is provided as a guide only. You should seek specific advice from a CCI adviser before acting. CCI 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 CCI. Reproduction of any CCI material is not permitted without written authorisation from the Editor. © Copyright CCI. All rights reserved

CEO’s Desk

Chris Rodwell

Time’s ripe to raise productivity Government and industry must work together to create a policy framework to benefit everyone

W

ith the Federal election behind us it is critical that we turn our efforts to making a stronger case for economic reform. The marked differences in the policy prescriptions of the major parties have been subject to plenty of post-election analysis.

In our view, the central ambition for our State and Federal governments should be to boost lagging productivity. This is the key ingredient for job creation, business success, wages growth and a rise in living standards.

To maximise Western Australia’s potential, it is vital that government and industry work together to create a policy framework that delivers for everyone.

That’s been the recipe we’ve followed with the State Government on issues such as repairing the State’s finances and also the approach we applied to fixing the GST. WA business does, after all, bat far above the average. Despite making up just 11 per cent of the population, it accounts for nearly half of Australia’s merchandise exports. While the resources sector is often accused of having a ‘dig it and ship it’ mentality, this is anything but the case.

WA is a relative powerhouse when it comes to productivity. In his Bateman Lecture address at the University of Western Australia last year, Federal Treasury Secretary Philip Gaetjens pointed out that in the area of technology adoption, WA’s mining sector sets the benchmark for other Australian industries to follow.

It is well ahead of the rest of the economy in the adoption of data analytics, intelligent software systems, Internet of Things, radio-frequency identification devices and cyber security. It also scores higher in management quality. If other sectors were to follow this lead “we would see a significant boost in our overall living standards”.

At CCI, our commitment to working with the Government to make it easier for businesses to invest and succeed in WA extends across a range of initiatives. This is just some of the work currently in train.

As a recently appointed committee member of Streamline WA, I will engage widely across the business community so that our regulatory approach doesn’t block out new investment opportunities or suffocate existing business operations.

We cannot afford to run second to other state or international jurisdictions as we seek to diversify our economy and I encourage you to provide me with examples of your experiences.

“It is vital that government and industry work together to create a policy framework that delivers for everyone” Invest and Trade WA Business Advisory Forum CCI has a longstanding commitment to building the trade and investment profile of WA. This includes our role in policy development and

economic analysis, promotion of Free Trade Agreements, issuance of Certificates of Origin, trade and investment consultancy for SMEs, as well as our long-held responsibility in the delivery of the TradeStart program.

There’s been plenty of commentary on the need for WA to recast its image and better coordinate its effort across investment, trade, international education and tourism. This coming financial year it is critical that we make a step change.

To this extent I’ll become a member of the State Government’s Invest and Trade WA Business Advisory Forum to help build out our effort and will soon also travel to China as a part of a delegation with the Treasurer, Ben Wyatt, to promote investment opportunities in the State.

Defence Advisory Forum WA has the capability to make a substantial contribution to the nation’s defence effort. The State Government’s establishment of a Defence Advisory Forum, which CCI will contribute to, will go a long way toward maximising the State’s potential by helping to ensure government and industry’s strategic approach is aligned.

CCI has played a key role in leading WA’s defence advocacy, and as the provider of the Industry Capability Network in WA, we provide a unique service in supporting WA SMEs to boost Australia’s defence capability across the full lifespan of major projects.

For more information about how you can support our advocacy efforts or to provide your feedback on these important matters, email editor@cciwa.com.

Streamline WA CCI has been a strong supporter of the establishment of Streamline WA to ensure WA has a risk-based, outcomes-focused approach to regulation.

Winter 2019 WA WORKS 5

6 WA WORKS Winter 2019 Image courtesy of Paul G. Allen, Find AE1, ANMN and Curtin University. © Navigea Ltd.

The Big Picture Inspecting the stern torpedo tube of HMAS AE1, the wreck of Australia’s first submarine, which was discovered in 2017 and sank in 1914. A team of researchers, including those from Curtin University’s HIVE, used a remotelyoperated vehicle to examine the submarine on the sea floor last year.

Over two days, 8367 images and 25 hours of full high-definition video were collected and processed by the HIVE team using advanced image processing techniques to generate a 3D model of the 55m long wreck, the only way to view AE1 in its entirety.

The expedition revealed a partly open ventilation valve, which would have let water into the engine room, most likely causing catastrophic failure of the electric engine system and the loss of 35 crew and officers.

“It’s an unfortunate event in history but it is good to be able to reveal and present what is likely to have happened and allow people to see what the submarine looks like today and allow its story to be told,” HIVE Manager Dr Andrew Woods said.

Find out how WA’s submarine and subsea industries will be the talk of the nation on page 49.

Winter 2019 WA WORKS 7

Economic Outlook

Rick Newnham

Positive outlook despite challenges Business investment is expected to increase gradually as mining gears up for new projects

W

estern Australia’s economy entered this year with most indicators looking positive.

Half way through, however, the tide has changed with last month’s national accounts release affirming that WA’s economy is recovering slower than expected.

Our domestic economy (which does not include net exports) contracted by 0.3 per cent over the quarter, driven by declines in business and dwelling investment.

We expect business investment will bottom out this year as the last of the major LNG projects conclude construction and enter production.

This includes Shell’s Prelude operation, which announced its first LNG shipment in June.

highlighted that four out of five (78 per cent) mining businesses expect stronger economic conditions in the next 12 months.

In contrast, the small and medium sized business community continue to report tough operating conditions, with low profit growth and weak demand constraining their capacity to grow and invest.

In the last year alone, business connections to the electricity grid in WA fell 12 per cent, signalling the closure of physical shops and premises.

With four out of five jobs created by business, there is no mistaking how critical their success is, not just to WA’s economy but to the 88,000 unemployed and 123,000 underemployed West

“The small and medium sized business community continue to report tough operating conditions” Looking ahead, business investment is expected to pick up gradually as the mining and resources industry gears up for new round of capital investment.

Investment in new major projects will go some way to replacing the current LNG investment cliff, although the volume of future investment is unlikely to reach levels sustained during the previous resources boom.

This is supported by the latest edition of the WA Super-CCI Business Confidence Survey, which

8 WA WORKS Winter 2019

Australians looking for additional hours of work.

Households are also feeling the pinch, with consumption remaining flat over the March quarter.

The combination of subdued wages growth, falling house prices and tightening lending conditions have forced highly leveraged consumers to spend what money they have on paying down liabilities and essential household items.

The latest ABS data indicates that WA

households currently have twice the amount of investment loans outstanding compared with other states.

While there are negatives, there have been pockets of strength in the economy and state finances. High iron ore prices have driven strong export performance and disciplined Government spending has helped put the State Budget back on track.

The return of the Federal Government and expectations of additional cuts to the cash rate this year will support growth in WA’s housing market and provide some relief to the increasing number of West Australian’s entering negative equity.

Nonetheless, global risks remain that could affect the pace of WA’s economic recovery.

WA is more exposed than any Australian state to the ongoing trade tensions between the US and China.

Currently, exports make up half (49 per cent) of the WA economy, and over half (55 per cent) of WA’s exports go to China — the highest proportion in almost three years.

Modelling suggests that a 1 per cent reduction in China’s GDP growth is associated with a 0.47 per cent reduction in WA mining gross value added growth.

As trade tensions escalate, the discussion will start to surround China’s response, as this will largely determine to what extent the tariffs will impact WA’s economy.

Although the pace of WA’s economic recovery has slowed and challenges remain, the outlook remains generally positive.

Global economic risks are largely out of our control, so for WA’s economy to maximise its growth potential, industry and government must work closely together to establish the best environment for businesses to invest and grow.

Premier’s Memo

Trailblazing at LNG This state leads the way when it comes to gas production and pricing and has the potential to become a global hub, writes Mark McGowan

W

estern Australia is blessed with an abundance of cheap and reliable natural gas. We also have a world-class, highly skilled workforce more than capable of delivering some of the world’s largest resources projects.

As the world transitions to a cleaner energy future, LNG will play a bigger role in the world’s energy mix. It’s an exciting time for our state and the opportunities to grow our economy and create jobs for West Australians are endless.

As a Government, we have made it clear we are eager to capitalise on WA’s strengths to cement our position as a global leader in LNG production, servicing and research and we are committed to working collaboratively with industry to make this happen.

In a first of its kind for Australia, I formed the LNG Jobs Taskforce in 2018. It comprises senior executives from APPEA, Chevron, Woodside, Santos, Shell, INPEX and UnionsWA, representing a new era of collaboration between Government and industry.

The taskforce’s key objective is to grow WA into a global LNG hub servicing the LNG

industry, to create thousands of new jobs for West Australian workers.

It will look at ways to facilitate the use of gas in downstream processing to develop new industry opportunities and drive upskilling for other ocean-based industries such as shipbuilding.

Mark McGowan

to LNG, and, as Premier, I will continue to spread the word at every opportunity.

I recently attended the Australian Petroleum Production and Exploration Association (APPEA) 2019 Oil and Gas Conference in Brisbane. My message to the gas-starved eastern states was simple — if you want cheap and reliable gas, come west.

Thanks to the domestic gas reservation policy introduced by the previous Labor government in 2006, WA enjoys the cheapest wholesale gas prices in the country and has managed to avoid the supply shortages that have crippled east coast industries.

The reservation policy that gives us these cheap prices has not stopped investment in LNG in WA. In the past decade, our state has seen $4 billion worth of investment in domestic gas projects and more than $150b in LNG projects. There’s $3b of gas projects and $5b of LNG projects either committed or currently under construction, with another $63b under consideration.

WA accounts for 60 per cent of the nation’s LNG exports and 20 per cent of the world’s LNG production.

But there’s more to be done.

Our recent State Budget included $10 million to develop a world-first microscale LNG plant as part of an LNG Futures Facility in Kwinana.

The proposed facility would position WA as a global leader in the development and testing of new technologies and processes, with the potential to create up to 1400 jobs. LNG companies, contractors, service providers and small to medium businesses would be able to test and refine new processes in a live plant environment with the plant expected to have the capacity to produce 10 tonnes of LNG per day.

“Bringing this gas onshore will create tens of thousands of WA jobs over many decades” Creating jobs for Western Australians is my Government’s number one priority and I am determined to support job-creating LNG projects like Browse and Scarborough. Bringing this gas onshore will create tens of thousands of WA jobs over many decades. Everyone knows I am a strong supporter of these projects.

We have been working constructively with industry to get them across the line.

WA has as great story to tell when it comes

Growing our State into a global LNG hub won’t happen without a concerted effort from Government and industry, and that’s what the LNG Jobs Taskforce is all about.

The taskforce has led to collaboration never before seen and we are keen to continue this coordination to make WA an even better place to invest.

Mark McGowan is the Premier of WA.

Winter 2019 WA WORKS 9

On the ground

‘There’s no job more interesting’ A Day in the Life … Serisha Sookraj, Site Engineer, Multiplex

I

t’s hard to describe a typical day in my role as in reality, there are no typical days in construction.

I’m currently helping to deliver the new five-storey science building at Edith Cowan University (ECU), which is set to be a new hub for science and medical and health science students at the university’s Joondalup campus.

As a site engineer, it’s my job to make sure our subcontractors are set up for the day and construction can progress smoothly and safely. We also have to act as the middle man between the client’s conceptual design and making it a reality. There’s constant organising and problem solving, thinking through the logistics of how to achieve what the client wants and making sure it’s all carried out safely.

I start each morning walking around site, visiting all of our subcontractors and making sure everyone is across what needs to be done for the day. Scheduling is so important in construction — we need to make sure everyone is concentrating on the right areas of the construction program so that other trades can follow on.

The middle of the day is the busiest time as this is when you need to resolve the various issues that come up. In construction, you don’t have the luxury of a few days to solve a problem — you need a solution right then and there, so you can keep the day on track.

In the afternoon, physical construction winds down and it’s back to the office to follow up paperwork and answer any design queries that have come up during the day.

It’s never dull on site. It’s not a job where you get bored sitting in front of a computer — I’m challenged, excited and on my toes every day.

People often don’t understand what a site engineer actually does. Some people hear ‘engineer’ and think you’re at a desk doing engineering calculations all day. In truth, it comes down to a lot of organisation and project management, and the ability to work with and manage people.

There is still a bit of shock value sometimes for people dealing with a female on site. I’ve had people assume that since I’m female, I’m going to be a pushover, but find out very quickly that is not the case.

I focus on establishing rapport and respect with everyone on site. As a builder, one of the most important things is our partnerships with subcontractors. We can’t be successful without them, so developing a mutually rewarding relationship with them is a key part of my role.

10 WA WORKS Winter 2019

I started out on the Multiplex graduate program, which was a great way to get into the industry. I was able to rotate through all of the different areas of construction management, from safety to design, which helps you find out very quickly what you enjoy and what you’re good at.

working in a small team. You learn a lot more that way.

One of my favourite experiences so far has been overseeing the super structure of the new science building at ECU and literally seeing the concrete poured. When you study engineering and learn about steel reinforcement and

“It’s not a job where you get bored sitting in front of a computer — it keeps me challenged, excited and on my toes every day” I also had the amazing opportunity to work on Optus Stadium as my first project as a graduate. I’m so proud to visit it now and still love to tell my friends that I built it single-handedly.

Now on ECU we have a much smaller project team, which I really like as you have to be across pretty much everything. I love the extra responsibility and challenge that comes from

columns and concrete it’s one thing on paper, but it doesn’t really click until you’re on site supervising it.

I’m always telling friends they should think about a role in construction — I don’t think there’s anything better. It’s always exciting, there’s always something happening, and as you watch the physical progress, you have a sense of fulfilment at the end of each day.

On the ground

Pyxis green light plan

New list for shutdowns

A

new source of maintenance work opportunities has arrived following the launch of a shutdown schedule on the Industry Capability Network (ICN).

The Australian major operations maintenance shutdown calendar on ICN Gateway provides information on the planned shutdowns of major operations across Australia.

Major operators are providing information to the site on a voluntary basis as a way of informing the market about potential future resourcing requirements.

ICNWA principal supply chain consultant Linus O’Brien welcomed the much-anticipated launch of the web portal.

“It will enable a very good understanding of maintenance scheduling, which will lead to better utilisation of manpower and resources,” he says.

Visitors to the portal can view a spreadsheet listing maintenance jobs coming up. They can

also submit an Expression of Interest to be notified about updates.

The calendar lists the project and operator, along with the type and dates of the shutdown or maintenance.

At press time the calendar listed maintenance work out to next March at the Port Waratah Coal Services Kooragang Terminal in NSW. Other listings include Santos for work in July at the Moomba gas plant and Gladstone LNG. ICNWA has also invited WA project operators to list their shutdown schedules on the new calendar.

ICN says operators will engage suppliers via their usual tendering process.

Any queries about the calendar should be addressed to the relevant state ICN office.

WA suppliers can contact Linus O’Brien on linus.obrien@icnwa.org.au or call (08) 9365 7556.

Two sites for desal

S

upplier opportunities on Perth’s next big water project are trickling nearer after Water Corporation referred two desalination proposals to the environmental watchdog.

The State-owned authority says a new facility — either a second unit at Kwinana or a major plant in the north at Alkimos — could be needed as soon as five years.

Both options involve an initial 25 billion litres per year desalination plant with expansion capability, and new pipelines along the ocean bed to take seawater into, and brine away, from the plant.

Water Corp referred the two choices to the Environmental Authority (EPA) in May after 18 months of feasibility investigations and public consultation.

“Current planning indicates a new water source may be needed for Perth within the next five to 10 years,” Water Corp spokesperson Clare Lugar told WA Works.

“Costs and timeframes in relation to construction and operations will be considered closer to when a new plant is needed.”

She said no decision had been taken to proceed with construction.

“By seeking environmental approvals, we are progressing source options in readiness for when a new source is needed,” she says.

The Alkimos plant would be sited in the Alkimos Water Precinct on Marmion Avenue, about 40km north of the city and south of Yanchep beach, while the Perth Seawater Desalination Plant 2 would be sited in the Kwinana Industrial Area in Naval Base.

Woodside is targeting a go-ahead this year for development of its Pyxis and Pluto North gas infill wells, following the start of detailed engineering design.

The company says front-end engineering design (FEED) has begun on development of the two wells, with a final investment decision expected late this year.

Drilling, construction, installation and commissioning activities could begin in the first quarter of 2020, pending approvals.

Two new and two in-fill production wells are proposed, as well as the installation of subsea structures, to complement production from existing wells at the Pluto and Xena fields.

Woodside estimates the drilling phase — beginning with Pyxis — will require 70 days per well, followed by installation and commissioning over 240 days.

“Hydrocarbons from Pyxis and Pluto North will provide flexibility to optimise production from the Pluto LNG plant,” a Woodside spokesperson told WA Works.

“Additionally, the development of Pyxis and Pluto North provides the Pluto joint venture the ability to mature future growth opportunities.”

Production will be tied in to existing Pluto infrastructure via subsea Christmas trees, flexible flowlines, production manifolds and service umbilicals.

Discovered in April 2015, Pyxis is about 15km north of Woodside’s production infrastructure for the Pluto field.

Gas from the Pluto and Xena fields, which underpinned Woodside’s original Pluto development, is piped 180km to an onshore LNG train via the not-normally manned Pluto-A offshore platform.

Early next year Woodside is expected to approve a second train for Pluto as part of its development of the Scarborough field, which is a joint venture with BHP. The company is completing tolling negotiations on processing BHP’s share of Scarborough gas through Pluto 2.

Work opportunities on Pluto LNG Train 2 can be viewed on the CCI-run Industry Capability Network at gateway.icn.org.au.

Winter 2019 WA WORKS 11

Rare earth

works

The push to dent China’s dominance of the rare earths market is opening up opportunities for the WA supply chain, writes Stephen Bell

12 WA WORKS Winter 2019

HMAS Melbourne fires a Standard Missile 2 from its guided missile launching system. © Commonwealth of Australia

Special Report

I

t’s time for suppliers to get up to speed on rare earths. These 17 elements on the periodic table with hard-to-pronounce names such as praseodymium are emerging as an unlikely opportunity, potentially worth billions of dollars, for WA’s supply chain.

Unlike lithium, where WA is the world’s biggest producer of the key lithium mineral spodumene from half a dozen mines, there is currently only one commercial rare earths operation in the state — at the Mt Weld mine near Laverton, which opened in 2011.

The remainder of world mine production and downstream processing is dominated by China, but WA exports could be dramatically expanded in the first half of next decade if several ambitious junior companies have their way.

In the Australian context, the genie was released from the bottle in March when Wesfarmers lobbed an unsolicited $1.5 billion bid for Mt Weld operator Lynas Corp. The bid, rejected by Lynas and unresolved at the time of writing, made Australian policy makers, industry and investors sit up and take notice.

Suddenly rare earths had gone from Chinese exotica to money on the table from a major Australian conglomerate.

Macquarie Bank notes that Lynas is the only major rare earth processor outside of China and the second-largest producer of Neodymium/ Praseodymium (NdPr) in the world. NdPr’s primary use is magnets in electric motors.

Growing demand for these magnets is tied to global auto sales, however there is two to four times the volume of rare earth magnets in an EV, the bank says, adding that Lynas’

major customers are Japanese trading house Sojitz and US companies that wish to purchase from companies independent of China.

For WA suppliers, there are several rare earth prospects looming which, combined, are valued at more than $2b.

These include a $500 million capital works program to 2025 by Lynas which, at the time of writing, is yet to reveal how much of the spending will be in WA versus overseas locations.

After facing increasingly tough government regulations for its refining plant in Malaysia, Lynas aims to relocate a “cracking and leaching” (C&L) circuit to WA, to remove low-level radionucleotides in Mt Weld’s concentrates prior to export.

As yet, Lynas hasn’t decided whether the circuit will be added to Mt Weld, or built at Kalgoorlie, which would have better access to raw materials, transport and energy.

Construction of the C&L plant — which would include concentrate handling equipment, high temperature kilns, leach tanks and filters — may start late next year.

Lynas also plans to upgrade the existing Mt Weld concentrator by installing a new grinding mill, additional flotation capacity, extra dewatering capacity, and supporting infrastructure.

In the junior sector, meanwhile, Northern Minerals has long-term plans to expand its Browns Range pilot plant in the Kimberley into a $330m commercial operation. Further afield, Arafura Resources is seeking backers for its mooted $1.1b Nolans project in the Northern Territory.

What are rare earths?

Your mobile electronic devices and electric car are riddled with them. They are also critical components in robotics and modern weapon systems, a fact that has many countries such as the USA worried about China’s dominance of global supply.

Welcome to the mysterious and exotic world of rare earths.

Despite their name, rare earth elements are actually common in the earth’s crust but difficult to find in economic concentrations.

Large-scale production only began in the 1960s when europium was used to generate bright red colours in early TVs. They have since come to play vital roles in most other high-tech gear, whether mobile phone circuitry, laptops or the innards of wind turbines and electric vehicles.

They are like invisible genies that make things work better, faster and longer, while helping to reduce energy consumption.

Winter 2019 WA WORKS 13

Special Report

From Left: Albemarle Vice President Lithium David Klanecky, Federal Trade Minister Simon Birmingham, US Ambassador Arthur Culvahouse and Premier Mark McGowan celebrate the start of Kemerton construction

US backs rare earths push

T

he United States’ top official in Australia says the economic powerhouse will continue to back WA’s critical minerals sector, including its efforts to diversify production of rare earths and guard against supply disruptions.

US Ambassador Arthur B. Culvahouse, who took up his position in March, also says the Trump Administration aims to help set up a “framework” for greater investment in all of Australia’s critical minerals, including lithium.

The show of support from Culvahouse comes amid recent international interest in rare earths, the group of elements that are used in a plethora of modern gadgets and are critical to many high-tech and defence applications.

only significant exporter outside of China courtesy of Lynas Corp’s Mt Weld mine — has emerged as an important player in US efforts to diversify its imports.

This was confirmed in America’s new Federal Strategy, unveiled in June, to ensure secure and reliable supplies of 35 minerals deemed to be critical to the economic and national security of the US. The list includes rare earths, alongside other battery-related minerals such as lithium and cobalt.

One of the goals in the strategy is to increase international exchanges with “partner nations” to share best practices and identify opportunities for trade and collaboration.

Australia, alongside Canada, the EU, Japan

“The US has supported Australia’s critical minerals and rare earth industry for more than 20 years” The interest intensified in June as rare earths were caught in the US-China trade war when China — the dominant global producer — threatened to restrict supplies after more sabre rattling between the two countries. The US imports about 78 per cent of its total rare earth needs from China.

Amidst these global tensions, WA — the

14 WA WORKS Winter 2019

and South Korea, is identified as a key US partner in expanding alliances on aspects such as mineral processing, mitigating supply risk and preventing supply chain disruptions.

Culvahouse told WA Works that the US has supported Australia’s critical minerals and rare earth industry for more than 20 years, with Geoscience Australia and the

US Geological Survey having a long history of collaboration.

“As Australia’s most important economic partner and top source of foreign direct investment (FDI), we know how important mining is to WA and will continue to support American investment in that sector,” he says.

Reflecting this support, one of Culvahouse’s first official engagements in Australia was turning the first sod at US-based Albemarle’s lithium hydroxide refinery construction project at Kemerton near Bunbury.

“It’s important to point out that when we talk about critical minerals, of which rare earth elements are a sub-set, we’re not just talking about developing new export markets,” he says.

“We should find ways to complement each other’s capabilities in extraction, processing, and refining as well.”

Asked if the US would welcome the opportunity to buy refined rare earth products — metals, alloys, compounds etc — from Australia to displace Chinese refined products, Culvahouse says his nation is “not focused on displacing any one country or supplier”.

“We’re happy to work with China in areas of common interest,” he says.

“However, the fact is that more and more aspects of daily life, both in the United States and elsewhere, depend on technologies that incorporate a growing number of critical minerals, so our collaboration on critical minerals isn’t just about finding

Special Report export or investment opportunities.

“It’s about the necessity of planning for our mutual security and prosperity.”

“I look forward to working through those issues in a formal Critical Minerals Dialogue, hopefully later this year,” he says.

Culvahouse says discussions up to now have been between “our diplomats in Canberra and Perth and yours in Washington”.

“But, given that so many of these mineral reserves are located in WA, I’m sure we will work together as the US-Australia dialogue proceeds and we pursue the goals of our new Critical Minerals Strategy.”

Culvahouse notes that a delegation of critical minerals-producing companies visited Washington, DC. recently to discuss the constraints and challenges to building refining and processing capabilities in Australia. The visitors would have included Lynas Corp, which set up a preliminary deal in May with Texasbased Blue Line Corp to develop rare earths separation capacity in the US. While the US supports private company investment in Australia, “we are not directing their investments”, he says.

“We can provide information and make introductions, even engage in direct advocacy when appropriate, but our Critical

Minerals Partnership is about finding ways to collaboratively address market constraints or failures.

“We aim to help set up a framework for greater investment in Australia’s critical minerals sector, but not direct the investment itself.”

Critical numbers The US certainly isn’t a new kid on the block in looking to back Australian critical mineral enterprises.

In fact it continues to be the top source of foreign investment in Australia overall.

“Our two-way investment relationship is worth A$1.6 trillion and supports many wellpaying jobs — close to 500,000 of them — in Australia and the United States,” says US Ambassador Arthur B. Culvahouse.

One of the more recent WA investments is by North Carolina-based Albemarle, which is spending an estimated $1 billion building a lithium hydroxide processing plant at Kemerton in the South West.

“The Kemerton facility is expected to employ 500 people during construction and an additional 500 highly skilled jobs once fully operational, in addition to providing ongoing demand for WA’s lithium miners,” he says.

Albemarle also owns 49 per cent of the world’s biggest lithium mine at Greenbushes

(China’s Tianqi owns the remainder) and has proposed building a second huge lithium hydroxide plant, in partnership with Mineral Resources, in the Pilbara.

In total American-owned mining businesses in Australia — the other big ones include Newmont and Alcoa — employ more than 14,000 people, mostly in WA, and account for a third of the mining industry’s exports, Culvahouse says.

“When you add up employee compensation, royalties, income taxes, and export income, the American-owned mining interests are contributing $30b directly to the Australian economy, again, mostly in WA.” The US had $939b invested in Australia overall as of the end of 2018, an increase of 3.7 per cent on the previous year and nearly 40 per cent more than the next biggest source of foreign direct investment.

“I think we’ll see continued investment in WA mining,” Culvahouse says.

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Winter 2019 WA WORKS 15

Special Report

Lynas lookalike

T

he most tangible and significant opportunity for suppliers to get a piece of rare earths seems to be Hastings Technology Metals, a Perth company hoping to start building its $427m Yangibana project, about 270 kilometres north-east of Carnarvon, late this year.

There are several major hurdles to be crossed before then, including final state and federal approvals, and financing. But Hastings already has built access roads, ordered several major long-lead items and engaged engineering construction firm DRA Global.

Hastings Chief Operating Officer Andrew Reid says the company has people on site to establish a permanent accommodation camp courtesy of an early works permit, but much of the current project work is being done in Perth.

“We are spending a lot of money at the moment finalising the design of the process plant,” he told WA Works.

“We raised $12m in a recent share placement and are going to use all of that money, really,

16 WA WORKS Winter 2019

to help us get documentation ready for the debt funding.”

The company has a staff of 30 in its St Georges Terrace office, with a further team of 15-odd people through its construction team at DRA’s offices. Reid says Hastings expects to finalise a formal project delivery contract with DRA in coming months.

Outside of the direct project work, Hastings

is seeking to finalise its Environmental Protection Authority (EPA) permit.

“That, we hope will be finalised by September/October,” he says. “At the same time we’ll progress the debt funding, and we’ll need to raise some more equity. All going well we are targeting the fourth quarter for full-scale construction start-up.”

The bigger construction items include a process plant, tailings storage facility and power station.

Reid says there will be many subcontracting opportunities and Hastings plans to work closely with DRA through the tendering process.

“There will be concreting, civils, SMP, electrical — all the major packages are likely to go out to tender over the course of the next few months,” he says.

“We want to predominantly engage with people where the owners are still active in the business. That’s so we can have that direct contact with the top. We are trying to base all of our contracts on relationships, that’s why we’ve selected DRA and that’s worked very well for us to date.”

Special Report

Junior company Hastings aims to emulate the success of Lynas Corp’s Mt Weld mining and processing operation (pictured)

Hastings has also made commitments to regional stakeholders in terms of employment.

“We certainly want to give priority to small businesses and people that have existing skill sets in that part of the world,” Reid says.

“Carnarvon is our closest and largest regional centre, and that is somewhat economically depressed at the moment. The town has about 180 houses that are empty currently. They haven’t built a new home in over four years.”

However, the town has received Federal Government support and had amenities such as a new high school and relatively cheap food costs.

“We are really hoping to leverage our project and get some economic returns back into the town,” he says.

Companies and individuals can register their interest in the project on the Hastings website: hastingstechmetals.com/opportunities/ Yangibana will produce a high proportion of neodymium and praseodymium (NdPr) — among the earth metals used inside EV motors and wind turbines. >

Market manoeuvres With trade tensions running high, the US may be regretting a lack of investment in its local rare earths industry over the past couple of decades.

According to the US Geological Survey, the country imports about 78 per cent of its total rare earth needs from China — its main adversary in an ongoing trade dispute.

The Mountain Pass mine in California, which re-opened in early 2018 after spending three years shuttered, is the only rare earths producer in the US, and its concentrates need to be refined in China before the individual metals can be used to make American consumer and defence products.

So being able to import rare earth metals, alloys or compounds from Australia would be very appealing to the US, which has identified them as critical to the country’s growth.

Hastings’ Reid says global rare earths production is largely concentrated among a small group of Chinese producers and market prices are therefore relatively opaque.

“China heavily regulates the amount of rare earth ore that gets mined,” he says. The ore is then distributed to about half a dozen big China parastatal institutions for processing.

“At the moment that’s driving the remaining Chinese non-parastatals to try and source ores from outside of China,” he says, noting that in 2018 the country became a net importer of several rare earth metals for the first time in three decades.

“A lot of that is coming from the Mountain Pass mine in the US and some from illegal material out of Myanmar. Because there is a lot of this product from Myanmar, the supply-demand is more or less in balance.”

The illegal supply has kept prices fairly subdued this year compared with 2017, when neodymium oxide nearly doubled in value.

Winter 2019 WA WORKS 17

Special Report

EV rush: Hastings plans to produce neodymium and praseodymium, two rare earths in demand from the electric vehicle industry

> Debt from Deutschland Hastings, which is majority owned by several Malaysian and Singapore companies, including those owned by Executive Chairman Charles Lew, believes it can fund the project by tapping debt from both Australia (via the Northern Australia Infrastructure Facility) and Germany.

The company recently received in-principle eligibility for the project financing of Yangibana for up to US$140m ($200m) from credit insurance company Euler Hermes, which administers the German United Guarantee Scheme (UFK).

The scheme, operated under a mandate from the German Federal Government, seeks to generate more jobs for workers in the EV automotive industry.

Under the deal, a tier one German company will be the buyer of a minimum of 5000 tonnes of mixed rare earth concentrate per annum from Hastings for at least 10 years.

Hastings says the agreement re-affirms Yangibana’s importance to Germany in securing long term future supplies of NdPr, the mix of rare earths that also generates the majority of Lynas Corp’s income from Mt Weld.

Hastings plans to use a similar process to Lynas at Mt Weld. “The big difference is that we will do all of the concentrate processing on site at Yangibana and all of the deleterious minerals — the uranium and the thorium — will be captured in a purpose-built, fully-lined tailings facility,” Reid says.

Yangibana’s concentrates will contain radionuclides at volumes no greater than background levels, which would enable the product to be classed as general cargo for export, he says.

However, the plan rests on clearances from both WA and federal lead agencies.

“We need Commonwealth approval because we’ve got uranium credits,” he says.

18 WA WORKS Winter 2019

EV rollout Forecasts of a sharp take-up of electric vehicles in the next decade are very good news for rare earth miners.

A big price spurt in neodymium during 2017 was attributed to heavy pre-orders for a new model announced by just one luxury EV maker — Elon Musk’s Tesla.

Hastings’ Reid says the company is now hearing similar comments on pent-up demand from European car makers.

The growth of EVs is absolutely huge,” he says. “Every major car manufacturer now has a range of models that they plan to rollout over the next few years. The momentum of EVs is pretty much unstoppable.”

Market analysts are predicting the better market penetration of EVs as major car manufacturers release cheaper models will increase demand for rare earths from about 2021 onwards, potentially boosting prices.

But Reid says Hastings is well-placed to finance Yangibana, even before the forecast price lift.

Part of his confidence is based on the company’s recent update of a late 2017 feasibility study.

“Our project is economic at current spot prices, which makes it quite unique amongst its peers,” he says.

“I don’t believe there are any other major rare earths projects that I’m aware of that could generate a financial model and return, based on current spot prices.”

Roughly 90 per cent of Yangibana’s revenue will be sales of NdPr and praseodymium (Pr).

Demand for NdPr is forecast to grow by six per cent year-on-year until 2030, with the use of Nd/iron/boron in EV drivetrains predicted to increase by 24 per cent over the same period, according to independent consultancy Roskill.

Special Report

Home on the Range

L

ast December, WA’s Northern Minerals shook up the global rare earths industry when it exported 2578 kilograms of rare earth carbonate from its $70 million Browns Range pilot plant near Halls Creek in the Kimberley to Chinese customers.

This made the company Australia’s second rare earth exporter after Lynas, and one of the few outside China.

But, at the time of writing, that commendable achievement had yet to lead to further shipments.

Managing Director George Bauk says the company is still finalising the technical and commercial outcomes of the shipment before exporting any more material.

“We want to make sure we go through the validation of all the analysis and that we get paid,” he says. The company is also continuing the commissioning of the plant, which was turned on in mid-2018.

Bauk concedes it hasn’t been an easy road since then, with the company going through some “extremely challenging financial strains” earlier this year.

But he insists Northern is now on firmer footing after receiving commitments to raise $41m in share sales, enabling it to repay a $23m research and development loan.

The company, which is part-owned by Chinese interests, remains focused on becoming the first significant producer of the heavy rare earth dysprosium outside of China. Each EV produced uses about 100 grams of the metal, which makes the magnets inside electric motors longer-lasting and able to retain efficiency at extremely high temperatures.

plant perform well enough to justify a much bigger second stage.

The first hurdle is to achieve nameplate production rate of 1100 tonnes per annum of mixed rare earth carbonate by the end of this year.

“Reaching nameplate is the simplest way to summarise success,” Bauk says. “But we’ve got to make sure it works economically and technically.”

A green light for a commercial development will require the plant to consistently produce product at its rated capacity, and at the purity levels specified by customers, he says.

Price movements in the underlying commodity will also be critical.

“If the rare earth price continues to strengthen, that will all work together in developing a bigger project at Browns Range” According to Northern, this makes it critical in the production of: • hybrid and electric vehicles • wind turbines • miniaturisation electronics • radiation detection equipment • refractive glass material

When to go big?

The WA supply chain is now watching Northern closely to see if the junior can make the pilot

“If the rare earth price continues to strengthen, that will all work together in developing a bigger project at Browns Range. And I’d hope that we’d be making decisions next year about that,” Bauk says.

There will be small milestones along the way, with the company planning to recommence mining rare earths, while starting the installation in December of a $4m ore sorting section.

The company also had a recent infrastructure win, with the McGowan Government allocating

$51m in the 2019/20 State Budget for upgrades to the low-quality Duncan and Gordon Downs roads, which are regularly flooded in the Kimberley wet season.

Being able to access the roads for longer during rain periods might allow expanded production rates at Browns Creek.

Bauk says the company has already “gone beyond” the typical WA mining project of one stage of processing.

“The plant we’ve built at Browns Range actually does stages one and two — we’ve got a chemical plant up there. We take a typical intermediate product, a Xenotime concentrate, and make it into a mixed rare earth carbonate.”

The next stage involves producing all the individual oxides, he says. “It creates greater value and, more importantly, opens up more markets.”

Meanwhile, Bauk says the company will continue its “crawl, walk, run” strategy at Browns Range.

“We have done step one of the heavy lifting of getting the product to where it is.

Now we’ve got to say, ‘Let’s keep going down that path — let’s get into separation, to metal making, maybe alloys’.

“We will have an endgame of what Northern’s capability is, but it needs to start sending signals out to the magnet manufacturers that they can buy product in Australia,” Bauk says.

“The one thing that should attract a lot of people to Australia is that we have the whole periodic table underneath our red soil.”

And, needless to say, WA is a stable investment precinct and a “great place to do business”, he adds.

Winter 2019 WA WORKS 19

Resources

Magnetite attraction WA’s iron ore revival rolls on with Fortescue aiming to start major construction on its Iron Bridge magnetite project late this year

Fortescue’s Iron Bridge pilot plant near Port Hedland

By Stephen Bell

F

ortescue Metals Group has never shied away from challenges in building its massive Pilbara iron ore export operations from scratch over the last decade.

So it’s not surprising that the youngest of the three Pilbara iron ore majors is prepared to enter uncharted territory for its latest venture — the $3.8 billion (US$2.6b) Iron Bridge magnetite project near Port Hedland.

The challenge this time is one of the biggest in WA mining: achieving financial returns from magnetite, with state production of the commodity currently restricted to two loss-making Chinese-owned mines.

Unlike the Pilbara’s traditional “dig and ship” iron ore, magnetite requires energy-hungry processing, and BHP and Rio Tinto have never felt the need to pursue it.

Nevertheless, Fortescue executives insist Iron Bridge will be a success, based on the results from a $500 million pilot operation.

Fortescue ran the plant following a 2013 deal with Taiwan’s Formosa Plastics Group to invest in the venture, which also includes China’s Baosteel.

Fortescue will also rely on a wealth of in-house experience generated by its use of innovative processing and automation technology to vastly

20 WA WORKS Winter 2019

improve the returns of its Solomon mining hub in the past half a decade.

Fronting the media in April after approving Iron Bridge, Chief Executive Elizabeth Gaines said the company was ready to deliver a world-leading project, adding that “significant proportions” of Iron Bridge’s capital and operating budgets would be spent on local employment, along with contractors and WA businesses.

“It is anticipated that local companies will win contracts to provide services including bulk earthworks and civils, onsite construction and electrical and communication systems,” she said.

About 3000 construction workers will be

needed to build Iron Bridge, 100km south of Port Hedland, and 900 full time positions will be generated once operations begin.

The project is slated to produce 20 million tonnes per annum of premium concentrate grading 67 per cent iron. It is designed to lift the grade and ultimate value of Fortescue’s iron ore exports, rather than expand production.

First ore is expected in the first half of 2022.

It is one of six new iron ore mines being developed concurrently by the three majors in a $16b investment spree tipped to require about 14,000 construction workers in the next couple of years.

But Fortescue Chief Operations Officer Greg Lilleyman holds no fears about securing capable labour for Iron Bridge, one of the later starters in the mini-boom. “Clearly there is a lot of activity ramping up in the Pilbara,” he said.

“But as we look back over previous high peaks of construction activity, we are still well short of that peak … seven or eight years ago.

“Working our long-term contacts, and engagement with contractors and suppliers, we’re absolutely confident of getting the A-teams for this project,” he said.

Between Iron Bridge and the $1.8b Eliwana replacement project, Fortescue will require 5000 construction workers in total over the next three years.

Resources

Fortescue plays Queens card

Moving into construction Early stage site activity for Iron Bridge, such as roads and accommodation has begun, while “more fulsome” construction is expected by the end of this year, Lilleyman said.

The project scope includes: • 22mtpa ore processing facility • airstrip and expanded village • 195km Canning Basin water pipeline • 135km concentrate pipeline to Fortescue’s Herb Elliot Port in Port Hedland • port handling facilities including concentrate dewatering, covered storage and reclaiming/ conveying to existing port outload circuits.

Fortescue says the project will also require up to 225MW of power, which will be delivered by a mix of existing and new generation sources in the Pilbara.

Iron Bridge is the first magnetite mine approved in WA since 2009, when China’s Ansteel and Perth-based Gindalbie started construction of Karara in the Mid West. Both Karara and Citic Pacific’s Sino Iron mine in the Pilbara have suffered major cost overruns, delays and ramp-up issues.

“Clearly we’re aware that magnetite projects in WA don’t have a great reputation, which is why we’ve spent a considerable amount of time studying and assessing the project,” Lilleyman said.

“A notable difference with our project is the extensive laboratory, metallurgical and process testing of over a million tonnes of ore using a full-scale demonstration plant and a large scale-pilot plant over the last five years.”

The nature of the orebody and Fortescue’s plant design enabled high-impurity material to be ejected “early on” in the processing circuit before any fine grinding, he said.

The mine would use high pressure grinding rolls and air classifiers, instead of conventional wet grinding methods such as semi and fully autogenous mills.

Suppliers interested in working on Iron Bridge can visit gateway.icn.org.au.

Fortescue has approved its third Pilbara iron ore mine in 12 months after giving the green light to develop Queens Valley.

The $415 million (US$287m) extension mine will require minimal new infrastructure as it is just 15 kilometres from the Kings operation at Fortescue’s Solomon Hub in the Hamersley Ranges.

Fortescue Chief Executive Elizabeth Gaines says the company will relocate its Solomon mobile maintenance facilities closer to Queens and the Kings ore processing facility.

“Construction will start shortly … and (is) expected to peak over the next financial year,” she told WA Works.

The company forecasts that about $218m will be spent on Queens in the financial year ending June 30, 2020.

“The Queens development will generate a small number of construction jobs, in line with the ongoing operation and maintenance of our Pilbara mine sites,” she says.

“A hydraulic barrier wall, in conjunction with other water management measures, is designed to regulate the impact of dewatering.”

Building Queens, which has an expected life of 10-15 years, will allow production of the low-alumina Kings fines product to be maintained, the company says.

Solomon produces about 70 million tonnes per annum of iron ore products in total.

Fortescue has now approved about $6b worth of new iron ore mine developments in the past year.

The Queens green light came seven weeks after the company sanctioned Iron Bridge, and a year after the Eliwana replacement project.

Winter 2019 WA WORKS 21

Talison’s tails Hundreds of workers will benefit from Talison Lithium’s decision to re-process a pile of old mine tailings in the South West, writes Stephen Bell

T

he rolling expansion of the world’s biggest lithium mine at Greenbushes is predicated on a rapid uptake of battery-powered electric vehicles over the next decade.

But Talison Lithium is also looking to the past in seeking to squeeze the most value out of the mine, which is navigating through a multifaceted $836 million expansion project.

The company recently appointed contractor Mondium, a joint venture between Monadelphous and Lycopodium, to design and build a new tailing retreatment processing plant for the mine.

Talison has not revealed the total cost of the project, which involves re-working about 10 million tonnes of tailings, however the Mondium contract alone is worth $100m.

The tailings are left over from the days when

22 WA WORKS Winter 2019

Greenbushes was tuned to produce tantalum, another high-tech metal, rather than lithium.

WA Works understands the tailings will be reprocessed over about five years, smoothing out any production blips at the mine as the broader expansion gathers pace.

Kwinana and Kemerton respectively and require extra mine production to feed them.

The $320m CGP2 project, which is almost complete, was undertaken mostly to feed Tianqi’s plant, while the ongoing $516m CGP3 expansion is directed more at Albemarle’s Kemerton facility, which started construction earlier this year.

A further mine expansion, CGP4, is planned but not formally approved by the Talison board at the time of writing.

Nevertheless, the Environment Protection Authority recommended that the overall expansion, including the tailings retreatment, should be allowed to proceed, subject to certain conditions.

EPA Chairman Tom Hatton said the clearing of 350 hectares of native vegetation on mining

“Talison Lithium is also looking to the past in seeking to squeeze the most value out of the mine” Talison’s owners — China’s Tianqi and US-based Albemarle — are each building downstream lithium hydroxide plants in

tenements — in State Forest used for mining since 1888, timber and some agriculture — was unavoidable for the proposal to go ahead.

Talison’s CGP2 construction project at the Greenbushes mine

“The proponent (Talison) reduced the size of the development envelope and, in preference to further clearing within State Forest, located proposed infrastructure in areas already disturbed,” he said.

Aspects of the expansion covered by the EPA clearance are: • tailings retreatment plant • developing an expanded open pit • establishment of two additional chemical grade processing plants • an additional crusher and expansion of a centralised Run of Mine (ROM) • establishment of a new mine services area and explosives storage and handling infrastructure • expansion of the existing Floyds Waste Rock Landform (WRL) • construction of an additional Tailings Storage Facility (TSF) • establishment of additional linear infrastructure corridors (bypass road, powerline, pipeline and road corridors) Talison Chief Executive Lorry Mignacca welcomed the EPA recommendation to the State Government to approve the project.

“The expansion will generate hundreds of new jobs in WA’s South West, allow Talison to retain its status as the world’s leading

lithium mineral concentrate producer and enable a new downstream industry in WA to feed the clean energy revolution,” he said.

“We have a proud track record of community focus and a demonstrated commitment to our environment and are pleased that this approach has been recognised by the EPA.” Mondium, meanwhile, will undertake all engineering and design, procurement and site construction as EPC contractor for the tailings plant.

The job includes earthworks, concreting, structural, platework, electrical and

instrumentation works and controls. It is Mondium’s largest contract to date and the second with Talison, following the delivery last year of a new chemical-grade plant feed system.

Mondium director Bob Osmetti said the award was a testament to Mondium’s capability of delivering quality projects.

“We are excited to have been awarded such a significant contract and look forward to continuing our strong relationship with Talison,” he said.

Work under the contract is expected to be completed by June 2020.

Winter 2019 WA WORKS 23

Resources

The technology behind Rio Tinto’s driverless iron ore trains in the Pilbara is attracting interest from North America

By Stephen Bell

N

Robots show their mettle 24 WA WORKS Winter 2019 Rio Tinto Managing Director of iron ore port and rail Ivan Vella (R) alongside Mines and Petroleum Minister Bill Johnston and Pilbara MLA Kevin Michel at the front of an Autohaul iron ore train. Photograph - Tom Rovis-Hermann

early a year after the first journey, the world’s biggest robot is doing its job so well that it may spawn a new export industry, Rio Tinto says.

Indeed, the iron ore giant reckons the $1.4 billion (US$940m) Autohaul project has cemented WA’s position as the Silicon Valley of the global mining industry because of its success in converting Rio’s 2.4km-long trains into autonomous heavy vehicles.

And, after safely travelling more than 4.5 million kilometres without drivers since July last year, there is still plenty of room for improvement, says Ivan Vella, Rio’s managing director of iron ore rail, port and core services.

Speaking at the official opening at Rio’s Karratha rail maintenance workshop, Vella said the company was “pleasantly surprised” by the efficiency improvements achieved to date, including improved speeds and journey cycle times.

“When there is technology involved, you always expect there will be some challenges and reliability issues that you need to work through, and the ramp up has gone much smoother and quicker than we’d actually hoped and planned for,” he said.

“On a normal day, about 95 per cent of our trains complete their journeys without any interruption. And for that last 5 per cent, the vast majority we may have to do a re-set or something like that from our operations centre.”

Such interruptions might include minor issues such as small electrical faults.

“It may not be material but the train will stop so that we can make sure it’s safe. Of course, our goal is to make sure the trains don’t stop and do complete their journeys safely.”

According to Vella, the average return journey time per train now sits at about 40 hours —

Resources

Rio Tinto’s highly automated rail maintenance facility near Karratha

roughly one hour better than the previous manned system, where typical driver shifts were 12 hours.

“We were doing three or four drivers to get through that, depending on where they started and stopped and what other delays were involved,” he said. “This is the key initial benefit from Autohaul.”

The official opening – ushered in by Mines and Petroleum Minister Bill Johnston — came seven years after Rio’s board approved the project. It then had to overcome significant delays, regulatory challenges and cost overruns to achieve the first fully autonomous journey in July last year.

the spotlight on the rail industry in WA and it has attracted a lot of interest,” Vella said.

“Some of the networks in Canada and the US, those big Class-1 heavy haul networks, are certainly looking at some of this technology.

“It’s important to understand there are multiple components, and they might be interested in one or two components, not necessarily the whole solution.

“We all grab onto the driverless piece, and for us that was important, but some of the safety components might be of standalone importance for some of those networks.”

Meanwhile, Rio hopes to squeeze more benefits out of its investment over time.

“The $1.4 billion Autohaul project has cemented WA’s position as the Silicon Valley of the global mining industry” Fitted with collision detectors, cameras and motion sensors, the trains are all monitored from Rio’s operations centre at Perth Airport.

Despite fears of job losses, Rio hasn’t made any drivers redundant, with their skills needed to investigate and fix train stoppage issues, help operate the maintenance yard, and pilot trains on a small part of the rail network that doesn’t use Autohaul.

“This project was never about job losses or cost savings in labour,” Vella said. “It was all about the efficiency of our network.”

He said Autohaul, developed with the assistance of key project partners Hitachi, Calibre, New York Air Brake, and Wabtec, had also improved rail safety, reducing risks at level crossings and at track maintenance operations.

“The success of this project has really placed

World’s largest The Autohaul technology was retro-fitted to Rio’s fleet of 221 locomotives — a mix of GE’s Dash 9 models delivered from 1995 and EVOs delivered from 2008 onwards.

The average trip for the robot trains is about 800km. On a typical day there are about 30 return journeys on the 1700km of track, shifting about 1Mt of iron ore.

This makes Rio’s rail system the biggest privately-owned heavy haul rail network in Australia, and the first to be automated in the world.

Each train set weighs about 30,000 tonnes, fully loaded. Blue lights at the front of the locos indicate the trains are running autonomously.

“It’s an eerie feeling being alongside the tracks and seeing all the locomotives go past with no-one inside them,” a veteran Rio maintenance person said.

One future saving might involve the use of hybrid fuels, with each locomotive currently guzzling about 5000 litres of diesel during a full port-mine-port journey cycle.

“Think about your (Toyota) Prius car — there is a battery and a motor, and when the car is in braking mode and generating energy, it stores in the battery,” Vella said.

“It’s exactly the same for a set of locomotives.

Imagine a giant battery on one of those locomotives that is taking energy from the train as it’s braking, storing it, and then using it when it needs power to apply on the network.

“The other is, of course, moving our emphasis from diesel towards gas. Obviously there are still some emissions there, that’s why we contemplate the hybrid as well, but it would reduce the emissions impact.”

Ivan Vella

Winter 2019 WA WORKS 25

En route for biggest bus deal With thousands of parts needed to build a single bus, the Public Transport Authority’s 10-year 900-bus contract is great news for WA’s manufacturing sector and supply chain, writes Robyn Molloy

M

alaga-based bus manufacturer Volgren is gearing up for the $549-million dollar bus building deal with a prototype set to roll off the floor in August in preparation for full production from October.

More buses to stock Perth’s public transport routes will follow, with a minimum of 90 per year to alight from the factory as part of the five plus five contract. Previous contracts — Volgren has been building buses for the PTA since 1999 — have had a minimum volume of 65 buses per year.

The low-floor aluminium diesel buses will

26 WA WORKS Winter 2019

replace ageing buses and allow options to expand the fleet as demand for services increases.

“This is the first time there has been a guaranteed amount of 900 units in one single order,” national manufacturing manager Matthew Smith told WA Works. “It is by far and away the single largest bus supply contract in Australian history.

“At various stages due to peaks and troughs in demand, we have supplied up to 130 units in one calendar year, but then you look at the breakdown of where that is in financial year. It has gone up and down to meet their requirements with variations to the contract.”

Volvo Bus Australia is the prime contractor for the order with the company’s Swedish factory supplying the Euro6 B8RLE chassis direct to Malaga.

“The chassis are mass produced by Volvo,” Smith says. “What comes to Australia is what we refer to as a buggy. This is the powertrain, the control modules and steering modules in a shortened format. This is akin to an internationally generic fully functional short chassis that can be built into any format vehicle.

“We take that format, we separate it into a full-sized chassis, cut the middle section and extend the steel work by five metres and add all the bits and pieces that make it ADR (Australian Design Rules) compliant.”

The contract guarantees jobs for Volgren’s more than 80 full-time and casual staff. There are more than 140 businesses in the supply chain, many of them from WA, with the company estimating a further 150 West Australians are in jobs as a result of the Volgren’s contracts.

Volgren opened the Malaga factory in April 1999, on the back of a contract with the PTA to overhaul the state’s entire fleet of 848 ageing buses by 2010. Since then it has delivered more than 1800 buses.

“In general, building a bus is a very complex thing and we are trying to do this on

Infrastructure It means stocking is precise and minimises cashflow tied up in inventory. Staff numbers ramp up and down according to how many buses the PTA needs by a certain time.

“We have this down to a fairly balanced art.

We have quite a few people on site,” Smith says.

“It doesn’t look like it but on the other hand that’s what lean manufacturing is about.

You only have the right operations done at the right time to get the value stream from point A to point B, so you can invoice and get the bus sold. And that’s a real trick that a lot of people haven’t figured out yet.”

“It’s all about material flow.”

There’s numerous workstations spread across the 5000 square metre site — from the steel preparation area to paint bays, the aluminium area where material is pre-cut, bent, folded, formed and made into exterior and interior panel kits.

From buggy to bus it takes 20 working days with the bus spending about two days in each station before moving to the next one.

Enviro design The PTA has left the door open to trialling hybrid and full electric buses if the technologies “are considered viable for Perth”.

“From buggy to bus it takes 20 working days with the bus spending about two days in each station before moving to the next one”

a microcosmic scale because of the size of our country,” Smith says.

“I have 17 different trades working in this building, from sheet metal workers, boiler maker welders, chassis workers, floorboard fitters, trimmers, glaziers, wiring, programmers there is quite a high variety there.

“Throughout Australia we source a highly complex amount of materials. Some of the more basic ones include interior linings, but then we have plastics, floorboards, fibreglass, aluminium, lights, cables and computers, local suppliers and distributers of paint products and factory consumables. It’s extensive.

“We have thousands and thousands of parts that come in to make each bus. We are trying to integrate a lot of complex bits and pieces to make it work.”

Smith says the supply chain is constantly evolving, meaning opportunities to break in are ongoing.

“We are, of course, always under pressure to provide value for our product. On the other hand though, quality is our first and foremost priority to the PTA. If they are not producing the quality we need, we look elsewhere.”

While thousands of parts are needed to build a bus, you won’t find a massive area holding stock at Volgren, which operates on lean principles — more value for customers with fewer resources.

Trollies with all required parts are issued to the shop floor hourly so each work station has everything staff need when and where they need it.

“You work out that the PTA want a bus every 2.3 working days and then you gear each station to meet that, so you are not over producing or under producing. So any given stage we have about nine vehicles at various stages of the build.

“From the start there is usually three in chassis, one in paint, one in undercoat, an assembly line that runs the buses through so there is always some at various stages.”

In May, Volgren put its first electric bus into production at its Melbourne site, with a 324kWh of batteries allowing a range of more than 250km. The prototype will be completed in the middle of June.

Volvo Bus Australia general manager Lauren Downs says the Euro 6 B8RLE diesel buses — those on order and used by the PTA — set the industry standard for fuel efficiency.

“The capacity to upgrade to new, greener technologies in the future — if such tech becomes competitive — is yet another way we’re futureproofing our transport network in WA,” Transport Minister Rita Saffioti said.

Winter 2019 WA WORKS 27

Infrastructure

Road and rail blitz gathers pace Contractors are preparing to tap into a publicly-funded blitz on traffic congestion over the next few years

By Stephen Bell

T

hey might not rival big mining and gas projects in scale and glamour, but road and rail upgrades designed to combat Perth traffic jams continue to generate a steady feed of city work prospects.

And they’ve turned up at a welcome time for contractors, with many businesses still struggling with the cooling of city commercial and hotel construction since the mining boom ended.

The latest State budget revealed a $9.1 billion investment over four years on road and rail projects, with an additional $266 million provided for Metronet rail and other public transport ventures.

It brought the total investment in the State Government’s flagship rail project to $4.1b over the next four years, according to CCI. “This will create a long-term pipeline of works and boost job creation, supporting the Government’s 150,000 jobs target,” CCI Chief Executive Chris Rodwell said.

Meanwhile, an additional $1.3b will be invested in 25 major road projects, including the upgrade of Tonkin and Roe highways.

This will be funded 80:20 by the Federal and State governments and take total investment to $4.2b over the forward estimates.

The road spending is badly needed. An

28 WA WORKS Winter 2019

audit by Infrastructure Australia in 2015 found that, without investment in the State’s infrastructure, WA would overtake Sydney as the nation’s most congested city by 2031.

Premier Mark McGowan pointed to new major projects in Perth’s east, some starting construction next year.

• Great Eastern Highway Bypass interchanges – $180m for new interchanges at Roe Highway and Abernethy Road in Hazelmere, construction late 2022 • Leach Highway and Welshpool Road interchange – $93m for a new grade separated interchange, construction 2021.

“The latest State budget revealed a $9.1 billion investment over four years on road and rail projects” The projects, funded jointly by the Federal and State governments, are: • Tonkin Highway Gap – $290m for widening from Great Eastern Highway to just north of Guildford Road with construction to begin 2020 • Tonkin Highway – $366m for grade separated interchanges at Kelvin and Welshpool roads and a new flyover at Hale Road, construction 2022 • Tonkin Highway extension – $505m on extending the South Western Highway in Mundijong, construction 2021

These projects added to an earlier $156m Federal-State funding commitment to major works on the Reid and Roe highways.

Decmil won a $46m contract from Main Roads WA in March for the 4km widening to dual carriageway on Reid Highway between Altone Road and West Swan Road and construction of the Arthur Street Bridge.

Construction of the 12-month project, which has a total cost of $77.5m, began in late May after Transport Minister Rita Saffioti turned the first sod. It is expected to generate 400 construction jobs.

Infrastructure

Decmil employees and (L-to-R) Main Roads Commissioner Peter Woronzow, City of Swan Mayor David Lucas and Transport Minister Rita Saffioti turning the first sods at the Reid Highway widening project

A further Main Roads contract for designing and building an $86m interchange at the busy Roe Highway and Kalamunda Road intersection is expected to be awarded later this year.

Boom gates and bridge Meanwhile, a Metronet “boom gate blitz” will remove up to seven level rail crossings on the Armadale line, with half of the $415m allocation to be spent in the next four years.

Federal funding of $207.5m has been committed for the removal of three level crossings at Oats Street in Carlisle, Welshpool Road in Welshpool and Mint Street in East Victoria Park.

A tender for removal of the first crossing at Denny Avenue in Kelmscott was also released, while preliminary planning was underway for the Oats Street and Wharf Street crossings.

However, the headline act for infrastructure buffs is probably the long-awaited replacement of Fremantle Traffic Bridge.

The current structure was built in 1938 as a temporary bridge across the Swan River. Saffioti said construction of the replacement would begin in 2021-22 and be finished in two years.

“This new bridge will put an end to the expensive patch ups on the old structure, which has served the area well for 80 years, but is deteriorating and becoming a liability,”she said.

Recently recognised as a priority by Infrastructure Australia, the new bridge has been costed at $230m, although the Public Transport Authority and Main Roads are still finalising the business case, which has been broadened to consider rail options.

Saffioti said the project offered the prospect of integrating additional rail capacity at a noted Fremantle bottleneck caused by passenger and freight trains sharing the same rail bridge.

“As Metronet expands across Perth, so will passenger demand and train frequency, which is why we need to carefully plan this vital river crossing to accommodate for both transport modes,” she said.

“With increased rail capacity, the new bridge could unlock the next phase of the expansion of freight on rail and reducing truck movements on metropolitan roads.”

The bridge would also be designed to incorporate cycling and pedestrian routes.

Winter 2019 WA WORKS 29

Infrastructure

Industry alights for train plan Step by step the State Government’s multibillion dollar Metronet plan is unfolding, with upgrades to Bayswater the latest to reach the next stage

T

he start of work on the critical $146 million upgrade of Bayswater Railway Station is just months away after the State Government closed tenders for the project.

A two-month request for proposals process finished on June 6, with the Public Transport Authority now reviewing the submissions.

The list will be whittled down to a minimum of two preferred proponents, who will progress to the alliance development stage of the twostage procurement process.

The winning bidder will design and build the upgrade and associated works through a competitive alliance contract, with Transport Minister Rita Saffioti aiming to start construction late this year.

Bayswater is a critical piece in the State Government’s transport planning, as the remodelled station will form the rail junction of the Morley-Ellenbrook Line, Forrestfield-Airport Link and the existing Midland Line.

The Government says the winning alliance will be required to demonstrate its ability to build both the station and a bridge over the King William Street/Coode Street underpass while the Midland Line remains operational.

It will also complete track, signalling, civil, drainage, and overhead line works, along with building retaining walls, delivering communications and control systems, and public spaces.

• Relocation of the dual-track, dual gauge passenger lines and all associated track infrastructure to align with the new platforms.

• The creation of a new precinct below the elevated railway to help create a vibrant town centre.

• Demolition of the existing station and rail bridge and associated infrastructure including removal of the existing at grade pedestrian crossing.

The project requires additional rail

“The critical $146 million upgrade of Bayswater Railway Station is just months away” The job includes: • A new rail bridge over King William Street, immediately to the south of the existing railway. The bridge extends to the east to create a second underpass to accommodate a new road connection between Beechboro Road South and Whatley Crescent.

• A new station on the rail bridge including an island platform (150m long and 10m wide) complete with station infrastructure, including all electrical works, communications works and infrastructure service interfaces as required.

30 WA WORKS Winter 2019

infrastructure between Bayswater and Meltham stations including: • A new narrow gauge turnback siding between Bayswater and Meltham station to be located between the two dual gauge running lines and providing turnback facilities from both the up and down mains in each direction.

• Relocation of the dual-track, dual gauge passenger lines and all associated track infrastructure to accommodate the turnback and new station connection.

There is also an option to carry out works should the line be tied to the future Morley-

Ellenbrook line, however this would not form part of the initial works unless agreed by the PTA prior to the project alliance agreement. It would include: • A second rail bridge over King William Street, immediately to the north of the new bridge.

• A second island platform (150m long and 10m wide) complete with station infrastructure.

• Additional station infrastructure to meet the needs of the expanded (4 line, 4 platform face) station, including passenger access, staff facilities and all associated services.

• Relocation of the dual-track, dual gauge passenger lines and all associated track infrastructure to align with the new platforms (extent to be confirmed at a later stage).

• The further development and modification of the new precinct below the elevated railway to further enhance the public amenities.

• Modification to affected and adjacent roads and pavements as required.

In late February PTA Principal Project Director Kevin Guppy briefed about 200 contractors on its plans for the project, including its intention to pay the top two proponents for their efforts — even if unsuccessful.

He confirmed there would be a payment to each Bayswater upgrade proponent.

“I know that’s a big concern of industry and we are having lots of discussion about the extent of that payment,” he said at the briefing.

“We are continuing to discuss that across government.”

Engineer’s Memo

Paul Young

Shaping WA from the sand up Anything is possible. It’s the mindset that drives our profession. It is also the theme of Engineers Australia’s centenary, writes Paul Young

D

riven by the sense that anything is possible, engineers have shaped — and continue to shape — our world.

In Perth, the most remote city in the world, engineers have indeed shaped our fragile city into one of the most liveable in the world.

Making it possible would have been a motivating factor for early engineers in establishing the Swan River colony in very difficult conditions and with materials completely foreign to them.

Our first premier, John Forrest, enlisted C Y O’Connor to be WA’s first engineer-in-chief.

His vision drove the construction of Fremantle Harbour and the iconic Goldfields Water Supply Scheme project that supplied drinking water to the Kalgoorlie goldfields almost 600km east of Perth.

From these first challenging years, our engineering skill — initially by European trained engineers — achieved amazing outcomes. In 1913, local engineering talent was born, when the University of WA established the Faculty of Engineering.

The WA Institute of Engineering was founded in 1909 and served local WA engineers until 1919 when WA successfully pushed for the establishment of a national body. Its core purpose was to advance the science and practice of engineering for the benefit of the community.

Our centenary is a time to take stock, to look back and marvel at our accomplishments and to appreciate our successes. From the Inner Harbour to Optus Stadium, we have a rich engineering heritage.

The Perth Wireless Station, Trans-Australia Railway, Canning Dam, Sons of Gwalia Underground Gold Mine and Fremantle Fortress reflect the depth and breadth of our early engineering feats.

More recent projects, such as the BP Kwinana Oil Refinery, Narrows Bridge, Kalgoorlie Super Pit, Ord Dam and Carnarvon’s Space Tracking Station, highlight the increasing use of technology and further development of rural WA. It is notable that the kickstart for WA’s first infrastructure projects was brought about by the discovery of minerals in remote WA. We can look back and be grateful for the foresight of those early engineers who envisioned

the possibilities and then led the construction of the infrastructure that still contributes immense wealth to WA. We look forward to continuing our belief that anything is possible — as we look to the stars, the sun, the wind, new minerals and digital technology that our next generation of engineers will harness for our advancement.

What is the next major step for Engineers Australia?

Engineers Australia is advocating the introduction of a comprehensive and compulsory registration scheme in WA. While other trusted professions, such as doctors, architects and lawyers must register to practice — engineers do not, meaning that any person can call themselves an engineer, even if they aren’t.

This poses significant risks to community safety, undermines public trust and devalues the

professional value of engineers to society.

We will continue to work with the WA Labor Government, which has indicated that it is open to exploring a scheme.

The centenary is also an opportunity to celebrate engineers and engineering with our volunteers, members and the public at large. It is an opportunity to acknowledge our volunteers, and to give them our thanks for their vision, passion and expertise.

I urge you to get involved in the celebratory events taking place this year and to take a moment to appreciate the incredible dedication demonstrated by our engineering community.

Paul Young is President of Engineers Australia WA, a fellow of the Institute of Engineers Australia, Chartered Professional Engineer, Engineering Executive and a member of the National Engineering Register.

“It is notable that the kickstart for WA’s first infrastructure projects was brought about by the discovery of minerals in remote WA”

Winter 2019 WA WORKS 31

What tourists spend is not the only contribution to the WA economy — the continued spending on construction and infrastructure also counts

By Rueben Hale

T

here might not be any more stadiums and large CBD developments in the offing, but tourism is still shaping as a future earner for the supply chain with billions to be spent on infrastructure projects of all sizes in Perth and the regions.

The flagship project is Perth Airport, which is planning a phased $2.5 billion refurbishment and expansion, with the first section, the International Terminal Upgrade, due to be completed in 2024.

And a range of small to medium-sized projects are also planned, from the rugged Kimberley in the north to the lush South West tourist magnets.

The State Government has made significant contributions to about 30 projects that are committed to or expected to be delivered, from the Broome Chinatown Revitalisation to the Rottnest Island Authority Jetty Upgrades.

The projects are expected to offer opportunities for business and job seekers to participate in the Government’s two-year

32 WA WORKS Winter 2019

action plan, which the State Government hopes will inject $11.8b into the economy and generate more than 100,000 jobs.

“2018 was a record-breaking year for our State, with Tourism Research Australia figures showing total out-of-state visitor numbers to the State were the highest on record,” says Tourism WA chief executive Rebecca Brown.

easy as possible for people to travel to and within WA and stay longer while they are here.

Jobs on the runway Federal approvals are underway for Perth Airport’s proposed construction of a new 3000m-long runway, which will see an investment of $520m and the creation of almost 500 construction jobs.

Chief Executive Kevin Brown says the third runway will deliver major benefits for Perth Airport’s airline partners, agriculture exporters, the business community, tourism, and the education sector.

“Last year also marked $10.4b in visitor spend with 11.9 million overnight visitors and 22.7 million intrastate day trips” “Last year also marked $10.4b in visitor spend (including $4.7b in regional WA) with 11.9 million overnight (domestic and international) visitors and 22.7 million intrastate day trips.”

Brown says airport upgrades and a range of projects underway or recently completed have an essential role to play in making it as

“Research by respected economic analysts ACIL Allen has confirmed the critical importance to Western Australia’s future economic prosperity of having a new runway capable of operating around the clock,” Brown says.

The project is a massive undertaking, which includes 1.5 million cubic metres of fill, about

Construction year, Reynolds says wharf infrastructure is critical for the island, with fuel works set to start in July.

“Initially our fuel jetty is going to be a new build, with plans to upgrade existing jetty infrastructure by 2021,” she says.

Studies are also underway to construct a barge landing at the army jetty, part of which collapsed and injured two tourists last year.

It will ease pressure on the main jetty at Thompson Bay and be completed by 2020.

“The main jetty will be for visitors and their luggage, improving the visitor experience,” she says.

“All other goods coming to the island will come to a dedicated space on the new barge. The design will include an emergency jetty mooring, and another cheeky idea is that I’ve even asked for the inclusion of a helicopter landing, which will be included in our design.”

Regions on the rise

185,000 tonnes of asphalt and 845,000t of crushed rock required for construction.

The approximate five-year construction is planned around the new runway being operational between 2023 and 2028, subject to demand.

Brown says construction of the runway would prepare Perth Airport for a forecast increase in annual passenger traffic from 14.5 million in 2016 to 35.4 million in 2045.

Improving regional aviation access and value is one of Tourism WA’s goals, according to Tourism chief Rebecca Brown.

In May, the Regional Airport Development Scheme (RADS) awarded $2.6m grant funding for 26 regional airports for improvement of infrastructure and safety at Gascoyne, Goldfields-Esperance, Great Southern, Kimberley, Mid-West, Pilbara, South-West and Wheatbelt regional airports.

Projects funded in this round include runway resealing, upgrading airstrip lighting, installation of fencing and nets, and improving operational safety and facilities for the Royal Flying Doctor Service operations.

In the South West, meanwhile, more than $30m will be spent on improvements to Bunbury’s waterfront by the end of a Stage Two program with the $11m Casuarina Drive

redevelopment and $13m in upgrades to Jetty Road causeway to start later this year.

A business case is also being prepared

by LandCorp for a multi-million dollar boat harbour and marine facility.

And up the road in Collie, trail corridors are being mapped out for the $10m Collie Adventure Trails project, including the construction of an additional 100km of high-quality mountain bike trails through the Collie River valley.

Further afield, in the Murchison, a working group has been appointed to prepare a scope of works to restore Carnarvon’s historic One Mile Jetty.

Carnarvon Shire CEO David Burton says the jetty is part of a “triangle” of key cultural and heritage sites to be developed for destination tourism.

And in the Pilbara, Aboriginal tourism should get a boost with almost $10m earmarked for the Murujuga Living Knowledge Centre and tourism precinct.

A grab-bag of tourism Cost $M New runway, Perth Airport

520

Bunbury waterfront

68

Rottnest Island upgrades

33

Kalbarri skywalk

20

Collie bike trails

10

Regional airports

2.6

Murujuga centre, Pilbara

10

Rotto makeover Over the next three years, the Rottnest Island Authority plans to spend more than $33 million on an island makeover to accommodate growing visitor numbers, which hit a record 770,000 last year.

The State and Federal funding will include more accommodation, redevelopment of the fuel jetty and construction of a barge landing at the army jetty.

Rottnest Island executive director Michelle Reynolds says the Hotel Rottnest expansion will add 80 extra rooms and nearly double the size of the complex to almost 18,000 square metres.

“We estimate the project will create up to 80 jobs over the next 18 months during construction,” she told WA Works.

With increasing numbers of visitors each

Winter 2019 WA WORKS 33

Construction

Full stream ahead A new fertiliser industry in the Pilbara will begin taking shape next year if Perdaman chief Vikas Rambal has his way, writes Robyn Molloy

P

erdaman Chemicals and Fertilisers’ ambitious plan to build one of the world’s largest urea manufacturing plants remains on track for construction to start mid next year, Chairman Vikas Rambal told WA Works.

In a rare, wide-ranging interview Rambal revealed more details of Perdaman Urea Project including that he hoped to secure a 20-year contract with “a large multinational company” in the next few months for urea — a fertiliser crucial to food production.

The $4.5 billion project, to be built on two sites of 34ha and 38ha, 8km from Dampier and 20km north of Karratha on the Burrup Peninsula, would produce two million tonnes of granulated urea per annum.

A closed conveyer would transport the urea 7km direct to Pilbara Ports Authority for shipping to local and offshore markets, with 50 to 100 shiploads expected per year.

Perdaman expects to secure funding prior to environmental approvals but after securing agreements for seawater and brine discharge from the Water Corporation, leases for land from LandCorp, port upgrades from the Pilbara Port Authority and agreements.

34 WA WORKS Winter 2019

A draft environmental review document was released for public comment in June, with the EPA expected to finalise its assessments early next year.

Construction is expected to take about 30 months, followed by six to nine months of commissioning before full production starts by early 2024.

It’s not the first time Rambal has attempted to build a urea plant — plans to build in Collie earlier this decade fell over when the company was unable to secure a deal for the supply of coal after the collapse of Griffin Coal and its subsequent sale to India-based Lanco.

While Rambal says Collie is very much in the past, his dream of establishing a urea manufacturing facility has been reignited after a 20-year deal was struck with Woodside for gas supply, with 130 terajoules required per day.

A heads of agreement for engineering, procurement and construction work was signed with SNC-Lavalin in November, while suppliers were invited to register their interest in more work packages listed on the CCIWA-run ICN Gateway in May. Rambal says while the technology and expertise must come from overseas — including

Denmark’s Haldor Torsoe’s technology for the ammonia plant and Netherland’s Stamicarbon for the urea plant, it will aim for a majority of local content.

“The project will do its best for 60 per cent of local content for overall project cost basis,” he says.

“It is like buying Rolls Royce engines, some key components will come from overseas such as gas turbines. We don’t produce huge pumps here so you have to go to Europe, Italy, Spain, so yes key components will come from overseas.

“From a technical point of view the technology we are bringing to Karratha will be world scale, one of the icons of WA, if I may say that.

“The technology that we are buying is dust free and you pay more for that. It is high grade, there is no question about it, and that’s what we produce in Australia, quality products.”

About 2000 jobs will be created during the construction phase with 200 permanent employees and 500 indirect jobs required to operate the plant once complete.

Rambal says nothing will be imported to produce urea, with seawater making up about 80 per cent of materials coming into the processing plant.

“The main ingredient on a daily basis is seawater, which we are getting from Water Corporation and gas, which we are getting from Woodside,” Rambal says.

Despite the project being built next to liquid ammonia producer Yara Pilbara Fertilisers —

Construction

of which Rambal was a founding partner before the infamous fallout with Pankaj Oswal — the company will build its own ammonia plant triple the size of Yara’s.

“Ammonia is integral, but we don’t sell ammonia. Our main product is urea, so all ammonia is converted into urea fertiliser.”

Perdaman will also build its own desalination plant and be self-sufficient for power.

Rambal says all product will be sold from the port for export, though he thinks up to 40 per cent will be headed for the eastern states, with other markets likely to include Japan, Korea, Indonesia, Malaysia, China Indonesia and India.

would be the biggest urea producer in the world “on one soil” and going large was the only way the venture could work in this country.

“This is what happens in Australia, you cannot build small plants because the labour cost is very high. That is the first question people ask me, how are you making it work. The only way we can make it work is the size, so the production cost comes down,” he says.

Rambal admitted he had some nerves towards the project in light of what happened to the Collie venture and said timing on environmental approvals was probably the biggest challenge.

“That is a big challenge but I am thankful the

“The $4.5 billion project would produce two million tonnes of granulated urea per annum” He said the product would be sold in the same way energy companies sell offtake and strike 20-year deals, with an agreement imminent at the time of speaking to WA Works.

“We are going to sell our offtake to a very big company soon,” he said.

He said the gas supply agreement with Woodside included a base price commitment for 20 years, because Woodside understood the concept of manufacturing. He confirmed the plant

EPA is working with us. We have a tough timeline because we cannot give them a couple of years, we have to finish next March.”

He says the project received a lot of interest from suppliers when packages were listed on ICN in May. “People who know me know I would not start a project and not continue. Collie stopped for a different reason, things can happen. Tomorrow, if Scarborough doesn’t come you can’t blame

me for that, but they know when I do a project I do a quality project,” he says.

Scarborough is the large offshore gas field that Woodside hopes to approve for development early next year. The company plans to pipe the gas to its onshore Pluto LNG plant, which will receive an extra processing train as part of the overall project.

Rambal says the urea plant has been listed with ICN to give WA contractors, including local indigenous suppliers, the opportunity to participate.

“We want to be up front, there is nothing we are going to hide from the community and from the suppliers. If they have the technology supply, then why not.”

Major components of construction will include: • gas supply pipeline • ammonia plant • urea production plan (footprint 73.5ha) • infrastructure and logistics buildings • utility block (air separation, power generation, water treatment, cooling water, flare, firefighting facilities • laydown and associated construction, (clearing/fill of about 50ha) • conveyor to port • production storage areas: including a refrigerated tank or 10,000 tonnes of ammonia, two sheds for 75,0000 tonnes of urea storage (plant site and port) • urea shiploading system It’s expected the plant will operate until 2049 when it’s scheduled for decommissioning.

Winter 2019 WA WORKS 35

Defence

Making

waves The defence industry is crowded with primes, but small companies are coming to the fore. WA’s Blacktree Technology has been playing in the big league and gives some insights into how it continues to break through, writes Robyn Molloy

W

A communications company Blacktree Technology has lately been forging a path as a defence exporter and supplier, recently completing its largest export order ever — multiple antenna systems bound for the United Kingdom.

The company may be based in a tiny office in Belmont but it is instrumental in delivering critical infrastructure — including data networks and RF systems covering the spectrum from HF radio through to Ka band satellite — for projects located around the globe including Australia, Germany, US, Italy and Japan.

The latest UK order — for dual helical phased matched antennas to enhance the country’s ultra high frequency (UHF) satellite communications ground station capability — builds Blacktree’s footprint even further.

Managing Director Joe Nevin and Director Joel Nevin, a husband and wife team, established the company in 2002, operating communication systems for a number of industrial clients and also special events such as Rally Australia and the now defunct off-road Australasian Safari in the remote outback.

It has five staff and operates on a model of using about 20 small businesses and specialist contractors when demand requires, with the high-tech products assembled — often by hand — in its Belmont warehouse.

Blacktree is currently in negotiations for

36 WA WORKS Winter 2019

more manufacturing contracts and expects production to increase from the current 60 per cent of turnover, with the balance coming from sustainment activities. The company’s supply chain is nimble and always able to explore potentially new projects, Joel says.

Easier playing field It’s also caught the eye of the Federal Government, with then Defence Industry Minister Linda Reynolds (now Defence Minister) launching the new Defence Policy for Industry Participation at Blacktree’s workshop in March.

While it’s a great time to be in the defence industry — the Federal Government has earmarked $200 billion over 10 years geared toward arming Australia, establishing and building on existing sovereign capability — becoming a defence supplier and exporter doesn’t happen overnight.

Blacktree has won more than $1.3m worth of contracts with Department of Defence since 2017 — including a $440,000 order for three remote control antenna pedestal acquisition on April 2, with equipment installed in air force, navy and army facilities across the country.

It is exactly the type of company the Australian Government hopes will benefit from its new Defence Policy for Industry Participation, which means tenderers must demonstrate Australian industry participation has been considered for >

Defence

Winter 2019 WA WORKS 37

Defence > national and local level procurements worth $4m for materiel and non-materiel procurements; and $7.5m for construction procurements, making it easier for small-tomedium businesses to compete for defence work.

Joel says Blacktree, along with many other Australian SMEs, have been advocating for the policy, which will apply to new projects and new phases of existing projects and be introduced throughout the year.

“The policy announcement at our office by Senator Reynolds was fabulous because it means for the smaller projects, companies will still have to demonstrate an Australian industry content, even down to local content,” she says.

“We are an SME manufacturer and we export. Those three things are very much the focus of government with the sovereign industry focus at the moment.”

Big break A big break for Blacktree came in 2014-15 when it was approached to take over WA innovation company Spirit River, which had been around since 1996, and a company that Blacktree has had a long association with.

Upping Blacktree’s capability to supplying communications equipment to global military forces, the company now had the products and expertise, but still had to build the trust of key customers who were becoming familiar with the Blacktree name.

Spirit River’s products hit the market more than 20 years ago and Blacktree is only now seeing them return for refurbishment, which Joel describes as a “phenomenal lifecycle” and testament to their quality.

“The products are critical to the operation of the anchor communication stations and allow you to simultaneously transmit and receive through the same antenna systems. But behind the scenes there are a complex system of components inline that ensure a stronger,

Helical antennas.

38 WA WORKS Winter 2019

clearer signal; including filters, combiners, low noise amplifiers, high power amplifiers.

We manufacture all those components in WA,” she says.

“In terms of volumes, manufacturing and sales it’s been spasmodic which is symptomatic when dealing with the Defence industry.

We’ve exported to Germany and the US predominantly in the last few years, we are just now finishing an order to the UK which is our largest export project to date.”

Parts are fabricated in WA by the specialist supply chain developed over a number of years that provide services such as machining of complex components from aluminium billets, cutting and bending complex metal components, which are subsequently treated with a range of finishes, with final product assembly completed at Blacktree’s workshop.

“These particular antennas, a lot of it is done here and it is done by hand because of the precision that is required. We don’t tend to use other countries if we can get it here,” Joel says.

Trade mission success Attending the Defence and Security Equipment International event in London as part of Team Defence Australia in 2017 — now under the umbrella of the Centre for Defence Industry Capability (CDIC) was an important step in helping Blacktree reconnect with Spirit River customers.

“That was a fantastic opportunity for us, we had not long been producing the Spirit River products, and while DSEI was held in the UK, industry representatives from around the world came and it allowed us to reconnect with customers in US, Germany and UK,” Joel said.

“Curiously, the UK order we are currently working on can be linked to meetings that took place at DSEI. It was that reconnect and those customers who were saying ‘who is Blacktree, how do I know you can make that

gear to that specification’, it took some time to develop the trust.

“One of our team members followed up with a subsequent visit the UK and spent time with potential customers. So, there were all these little steps that led to this customer having the confidence to place this order that exported in May.”

Next time you’re in Horse Guards Parade in central London, have a look for the Blacktree antennas.

Defence

Grants and guidance Winning a CDIC Capability Improvement Grant in August last year, and matched by the company, has helped Blacktree find its focus in the industry by reviewing its internal systems, developing a marketing plan and strategy relevant to the industry.

“Applying for funding such as the CDIC grant … has repositioned Blacktree from a small company to one with quite a deep engagement with our Defence customers,” Joel says.

“I think this is evidenced by the selection of Blacktree as the location for the recent announcement of the Defence Policy for Industry Participation by Senator Reynolds”.

“We have an existing product, the work has been to reconnect with the market both in Australia and overseas, which is what we are doing at the moment. CDIC and Team Defence Australia have been fundamental to that.

“As a small business, it is hard to find the money to spend on things you need to do to be big, to play big.”

The company is also completing ISO9001 certification as further validation of its products and processes.

“When you are dealing with the prime organisations, such as Thales, Raytheon, Boeing, BAE etc, they like to see companies that are aligned to their standards, so it is very important for companies wanting to be involved in their supply chain, to be ISO certified. This has been a huge step forward for us and will be invaluable in our business going forward.”

Blacktree was also boosted by a listing in the Australian Military Sales catalogue in February, which advertises surplus ADF equipment, and products and services of selected companies for export. “This prompted a visit to our office by Governor Kim Beazley. The Governor was very impressed with the work we are doing”.

“Blacktree is a bit unique because our product is acknowledged as world leading, often forming a core component in the UHF SATCOM anchor stations. To the point where our components are certified by JITC for use in certain applications,” Joel says.

Arizona-based JITC (Joint Interoperability Test Command) supports testing for the Defence Information Systems Agency.

“So, when a Defence force requires communications systems to be used on a

particular UHF SATCOM network, they must incorporate our equipment with certain types of radios within the anchor stations. That fundamentally comes back to the work that Spirit River did in developing a world class product.”

Door open for space industry Blacktree is also on the radar of WA’s Chief Scientist Peter Klinken, who visited the company recently and discovered its technology could be tailored for the space sector.

“We’re in some early stage negotiations at the moment but there are some things we can do that the space industry needs and it’s a matter of saying ‘well actually what you need is out there and can be tailored to that application’, and that has been a bit of a revelation,” Joel says.

Rather than develop new technology, Joel says Blacktree has products that are eminently useable for communicating with Low Earth Orbit satellites and have a proven legacy coming from the defence sector.

“We have a motorised antenna pedestal that is remotely controlled and is currently used to track communications satellites orbiting the earth, so you can see there is some alignment there with the space industry,” she says.

Winter 2019 WA WORKS 39

Major Projects List

Pilbara purple patch Iron ore dominates in $5.6b of new projects

By Stephen Bell

I

ron ore has enjoyed a bumper price climate this year due to Brazilian supply shortages as a result of Vale’s tailings dam collapse in January.

It is also in the midst of a Pilbara purple patch, with the steel-making commodity generating the bulk of the $5.6 billion-worth of major projects identified for this edition of WA Works’ latest Major Projects List.

The biggest by far of the eight new listings is Fortescue Metals Group’s $3.8b (US$2.6b) Iron Bridge project near Port Hedland, which will take the company into the world of magnetite processing.

giant Roy Hill operation came on line in late 2015.

Corunna, of course, is dwarfed by the huge investments being made by Rio Tinto, BHP and Fortescue.

Not since the early years of this decade have so many contractors, engineers, tradies and suppliers been shuttling in and out of Karratha, Port Hedland and Newman from Perth.

WA Works estimates there is nearly $16b of iron ore construction underway or approved as the majors either replace production or introduce new products.

Rio and Fortescue are building three mines each, while BHP is focusing all of its efforts on the giant $5b South Flank project.

“The biggest by far of the eight new listings is Fortescue Metals Group’s $3.8b Iron Bridge project near Port Hedland” Fortescue also recently approved the $415 million (US$287m) Queens Valley project, designed to be an extension of its Solomon Hub. At the smaller end of iron ore is Hancock Prospecting’s proposal to mine Corunna Downs, a project near Marble Bar previously touted by Atlas Iron, which was taken over by Hancock last year.

Though not strictly “major” — Atlas costed the project at $53m — we have included Corunna in the list as a notable move by Gina Rinehart’s Hancock to develop its first new mine since the

40 WA WORKS Winter 2019

But the updated list it is not all about iron ore. The remaining six new entries are a mix of accommodation, defence, education, lithium and mineral sands.

Woodside’s Bay Village worker accommodation camp at Karratha comes onto the list nearly two years after the Multiplex-led consortium was first announced.

Why the delay? The project has only now started construction after Woodside and the City of Karratha negotiated an amended proposal,

including a reduction in beds from 700 to 604.

The $400 million contract value includes management of the operating facility by consortium partner Compass Group.

At the other end of the state, Curtin University’s $300m Stage One Exchange precinct project is also headed into construction.

InfraRed Capital Partners has entered into a 35-year partnership with Curtin to design, finance, construct and operate the new development in the heart of the university’s Perth campus.

Probuild has the construction contract, with works slated to begin in August and finish by January 2022.

The completed development will include 1000 new student accommodation beds, a 60-room Waldorf boutique hotel, 38 apartments, 3000 square metres of commercial space and 15 specialty retail shops.

Separately, Lendlease won a contract to build Curtin’s new $110m design school, the other major development for Exchange Stage One. The contractor expects more than 50 subcontractors will be needed on the project.

Definitely the most distant of the new listings is Defence’s $190-220m proposal to upgrade the airport at Cocos Islands, about 2900km northeast of Perth in the Indian Ocean.

Suppliers based in Perth — the closest Australian capital city to the island via a fourand-a-half-hour commercial flight — will be in the running for jobs on the project.

Two mining projects complete the new arrivals.

Hundreds of workers will benefit from Talison Lithium’s decision to re-process a pile of old mine tailings at its Greenbushes operation in the South West.

Talison, operator of the mine on behalf of owners Tianqi and Albemarle, recently awarded a $100m contract for Mondium to design and build a new tailing retreatment processing plant.

Tailing off the new additions, if you’ll excuse the pun, is the proposal by Strandline Resources to build the $257m Coburn mineral sands project near Shark Bay. A feasibility study in April found that 300-plus workers would be needed at peak construction of the project, which would tap rising demand for zircon, a mineral used in ceramics.

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For advertising and subscription queries email waworks@cciwa.com or call 1300 422 492 Winter 2019 WA WORKS 41

Defence

Papalia’s strategy of sustainment

By Robyn Molloy

T

he State Government has appointed an ex Federal Government senior defence advisor to a key State role, while pushing ahead with plans to develop more critical infrastructure for the Australian Marine Complex (AMC).

The moves are part of the McGowan Government’s ongoing effort to ensure WA gets the lion’s share of lucrative maintenance and sustainment contracts for Australia’s submarines and frigates.

Defence Issues Minister Paul Papalia told WA Works the Strategic Infrastructure and Land Use Plan for the AMC would be completed by the end of the year, with development to occur in three stages: short (two to five years), medium (five to 10 years) and long-term (10 years and beyond).

The Department of Jobs, Tourism, Science and Innovation was handling the development of the plan, which would guide investment and expansion activities related to the AMC. “Tenders to develop the plan closed on May 29,” he said.

“The process is part of the State Government’s commitment to ensure the AMC meets current and future defence requirements, and to ensure infrastructure to support other industry sectors, such as oil and gas, is also taken into consideration, planned for and optimised.”

Establishing WA as the naval base for maintenance and sustainment, including the transition of full cycle docking of the Collins Class Submarines to WA, was flagged in the Western Australian Defence and

42 WA WORKS Winter 2019

Defence Industries Strategic Plan released last October, and hinges on the development of the Henderson-based AMC. “The McGowan Government will be working closely with the Commonwealth Government and Defence to advocate for this transition and ensure our industry is ready at the earliest opportunity,” he said.

“The primary aim is to secure the State as the principal location for the delivery of all maintenance and sustainment of Australia’s submarines and frigates.”

Papalia said the appointment of Matt Moran, a former senior advisor to Christopher Pyne in his time as Defence Industry and Defence Minister, would support the growth of WA’s defence industry.

“Mr Moran brings an extensive knowledge of Defence — he worked on Defence’s most complex and expensive projects over the last few years,” he said.

“We will be working with the returned Federal Government to ensure their commitment to build an additional three naval vessels in Henderson, two mine warfare support vessels and a hydrographic vessel, is realised at the earliest opportunity. This will add to the 31 minor war vessels already being built in the state.”

Papalia welcomed the Federal Government’s appointment of two WA-based politicians, Senator Linda Reynolds to the Defence portfolio and Melissa Price to Defence Industry.

“The WA Government looks forward to continuing to work with the Federal Government on building the defence industry in the State and securing opportunities for collaborative work with Defence,” he said.

“We welcome the new ministers who bring a strong understanding of the State’s unique strengths and capabilities and look forward to working closely with them.

“South Australia was well served by Christopher Pyne — he has set the bar high for Senator Reynolds and Melissa Price and the WA defence sector will be watching to see what is delivered,” Papalia said.

Advisory forum A new Defence Advisory Forum headed up by WA Defence Advocate Rear Admiral (Rtd) Raydon Gates has been established to advise and support the State Government on defence industry capability and business development and investment issues such as workforce, skills, research and infrastructure requirements.

It includes representatives from key industry and defence sector stakeholders including CCIWA, Australian Industry and Defence Network; Henderson Alliance; Australian Industry Group; Construction Contractors Association; Centre for Defence Industry Capability; and WA’s four public universities.

Defence

‘Perfect storm’ for defence work There might be $200 billion on the table to build Australia’s Defence sector but it’s not a free ride for businesses. The good news is there is support available to crack into the complex industry

By Robyn Molloy

S

ince the Defence White Paper came to light three years ago, it has become crystal clear that Australian industry is fundamental to the Federal Government’s ability to modernise our armed forces.

Industry is also critical to the government’s target of spending two per cent of GDP on the defence renewal program, a fact that has opened up many doors for Australian businesses.

Duncan McIntyre, who oversees the Centre for Defence Industry Capability (CDIC) in his role as Head of AusIndustry’s Industry Capability and Research division, describes the conditions as the “perfect storm”.

“When they (Defence) do their strategic analysis they have always identified fundamental inputs to capability, such as major systems (such as strike fighter aircraft) or supplies (such as petroleum and access to a stable supply of oil) but those capabilities have not included Australian industry,” he told WA Works.

“So the realisation came that there were all kinds of strategic threats to Australia that could occur where we were cut off from our suppliers and couldn’t get the stuff we need. That makes Australian industry essential to capability.

“The other thing is the Government has made a series of decisions over the last three years that mean over the next 10 years there will be $200b more pumped into defence equipment than was the case prior to those decisions. That’s a substantial increase.

impetus and direction for industry as they look at diversifying and expanding into the Defence sector.”

McIntyre says CDIC’s role is like a broker — helping companies and Defence work together, driving the transformation between defence and industry. However, it’s not a blank cheque for potential suppliers.

“Defence procurements typically have exacting standards and specifications, and these expectations will flow down through your customers in the supply chain.” he says.

“When they say they want it done at a certain

“WA industry is well placed to work in the highly regulated, high compliance Defence environment because of its skills and capabilities” “Whilst it might be less risky for the international Defence Primes to continue to use their embedded suppliers, there would be little opportunity for Australian businesses to continue to develop capability and grow their business in the important Defence sector.

“Coupled with the Sovereign Industrial Capability Priorities, this provides both the

time, they want it done. Defence generally expects products to work first time, every time, and to specification. This is a prerequisite, not a point of difference. The key discriminators are ‘lighter, quicker, stronger’. In this way they can be a little bit different to other buyers that companies may be used to working with, particularly SMEs, and this is one of the

reasons the Primes are so important.

“Primes are used to having the size and the breadth to cope with those long-term and complex projects. Often the role for Australian companies is not to work directly with defence, it’s to work with a defence supplier who might be a Prime.”

He said it was part of CDIC’s role to look for strategically important opportunities to help Primes source Australian firms to help build capacity.

SMEs may not be in the supply chain for various reasons such as not having reached accreditation standards, lack of scale and key infrastructure, or excessive prices.

“Often Australian companies haven’t had to drive down their costs and the CDIC can help them work out ways to then make them competitive,” he says.

“Defence Primes want what all big companies want — low risk and low price and stability.

So sometimes our role is to help companies understand their own costs well enough to persuade the buyer that engaging them at a particular price is worthwhile and necessary for what they will do in the longer term.

“It’s not about tipping the international Primes out of Australia, it’s about facilitating Australian companies to work in their supply chains.”

“There is an argument one needs to make with a Prime, usually why they should pay more for a better product. And that’s not always easy >

Winter 2019 WA WORKS 43

Defence > to persuade them but defence is commonly keen on quality so there are opportunities there.”

McIntyre says CDIC is also working with Primes to introduce Australian SMEs to their global supply chains.

“We’ve said if you want to be doing business in Australia, you have to be working with Australian industry because it is a fundamental input to capability,” he said.

Once established in the sector the rewards include long-term contracts at premium prices, allowing businesses to continue to develop the quality of their products.

44 WA WORKS Winter 2019

“That quality can be leveraged to sell into other markets, so it can be very profitable and very long term with contracts that provide a baseload of work and provide a platform for further growth,” he says.

“There may be bumps along the way.

Developing the necessary service offerings, skilling, tooling, accreditations and partnerships will take time, planning and investment.”

Of the 198 businesses across the country that received business advisory and facilitation services from CDIC in 2018/19, 28 were from WA while a further 201 businesses in WA sought informal services from a total of 292.

McIntyre says WA industry is well placed to work in the highly regulated, high compliance Defence environment because of its skills and capabilities in the resources, oil and gas sectors.

CDIC can help companies navigate the barriers such as accreditations and becoming more competitive.

“Industry remains wholly responsible for their ongoing commercial decisions when pursuing work in this highly complex sector,” McIntyre says.

“There are always opportunities for businesses wanting to work with Defence. In addition to our major programs which includes the Offshore

Patrol Vessel (SEA1180), the Future Frigate Program (SEA5000) and the future Submarine Program (SEA1000), additional business opportunities to tender for work are advertised through the Australian Government procurement information system, AusTender.

“All open Approaches to Market (ATMs) are published on AusTender by Australian Government agencies including the Department of Defence.

“In addition, the Industry Capability Network (ICN) Gateway is an excellent resource for businesses wanting to connect with the major Defence Prime companies, including BAE Systems which will be delivering the Hunter Class Frigate and Naval Group and Lockheed Martin Australia for the Future Submarine Program.”

CDIC’s matched grants include the Capability Improvement Grant of up to $250,000; Sovereign Industrial Capability Priority Grant of up to $1 million; and Defence Global Competitiveness Grant of up to $150,000.

The Global Supply Chain Program works with prime contractors to identify opportunities for Australian businesses within their international supply chains. Since 2007, the participating Primes have awarded $1 billion of work to Australian businesses.

Defence

An MRH-90 helicopter from HMAS Canberra pays a visit to Cocos Island airport

Steamy defence prospect The remote tropical holiday spot of Cocos Islands is shaping as the latest defence infrastructure prospect for the WA supply chain

By Stephen Bell

T

he Department of Defence’s looming acquisition of a new surveillance aircraft suited to long-range Indian Ocean missions has spawned a new infrastructure prospect for WA suppliers.

To accommodate the new planes — expected to be delivered over the next five years — the RAAF needs to upgrade infrastructure at the Cocos/Keeling Islands Airport, about 2900km north-east of Perth.

Defence opened a request for tenders in June for an upgrade worth up to $220 million, subject to Government and Parliamentary approval.

Contractors can lodge their pitches for an integrated management contract up until August 8 on the Federal Government’s AusTender site tenders.gov.au.

“Initially, this engagement is for the planning phase only,” a Defence spokesperson told WA Works.

“Subject to Government approvals, the contractor may be appointed for the delivery phase of the project. Tendering of construction subcontractor packages is expected in early 2021.”

The current estimated value of the project is $190-220m, Defence says.

The upgrade will allow the airport to support the RAAF’s new P8-A Poseidon surveillance and reconnaissance aircraft.

In April, Defence held an information session in Perth — the closest Australian capital city to the island via a four-and-a-half-hour

commercial flight — on the proposal.

The services tendered will include strengthening and widening of the runway, taxiways and aprons; refurbishment of airfield ground lighting; and relocation and upgrading of stormwater infrastructure.

Asked if Perth will provide the bulk of workers, Defence says the source of skilled labour, along with the size of the construction force, will be determined by the successful tenderer’s approach to the works.

737-800 design, 12 P-8As have been approved for acquisition and all are due to be delivered

by March 2023.

The modifications include: • weapons bay • under wing and under fuselage hard points for weapons • increased strengthening for low level (down to 200ft) operations and high angle turns.

The aircraft has a communications system including radios and data links across VHF, UHF, HF and SATCOM. An internal fuel capacity of almost 34 tonnes allows the P-8A to conduct low level antisubmarine warfare missions at a distance of greater than 2000km from base.

Despite the increased surveillance range in

“To accommodate the new planes the RAAF needs to upgrade infrastructure at the Cocos/Keeling Islands Airport” “Defence’s Policy for Industry Participation will apply to this project, and information regarding the approach to maximising opportunities for local business enterprises will be sought at time of tender.”

The most significant part of the program is to widen the runway to enable take-offs and landings by the Poseidon maritime patrol aircraft, which is wider and heavier than the old AP-3C Orions it is replacing.

It means the runway shoulder will need to increase from 3.5 to 7.5 metres, however the length will remain at 2441m, Defence says.

Based on a substantially modified Boeing

the strategically important north Indian Ocean region, Defence says it has no plans to support the new aircraft out of Cocos.

“The upgrade will not include new buildings or shelters,” the spokesperson says.

“The existing supporting infrastructure at the airport is currently sufficient to support P-8A Poseidon operations.

“There will not be any P-8A Poseidon aircraft permanently based at Cocos Island, therefore there is no requirement to base P-8A Poseidon support staff there permanently.”

WA businesses wishing to enquire about the project can email R8129_CKI-AFLD@aecom.com

Winter 2019 WA WORKS 45

Defence

Three new naval support ships The Morrison Government’s re-election has ensured a continued pipeline of major defence shipbuilding at the Henderson precinct, writes Stephen Bell

46 WA WORKS Winter 2019 Anzac frigate HMAS Toowoomba departing Sydney Harbour

Defence

W

hatever their political affiliations, local suppliers to Defence naval shipbuilding programs had reason to be pleased by the Liberal-National Coalition’s surprise Federal election win.

Just three weeks before the May 18 poll, Prime Minister Scott Morrison promised a $1 billion shipbuilding boon for WA if his Government was re-elected, with the first of three vessels to begin construction early next decade.

It will be a healthy boost to marine construction at Henderson’s Australian Marine Complex (AMC), where BAE Systems (Anzac frigates mid-life sustainment), Luerssen (offshore patrol vessel (OPV construction) and Austal (Pacific patrol boats (PPB construction) are already directing major defence programs.

The supply chain is now eager to hear more details of Morrison’s new plan, sketched out during a visit to Civmec’s factory at the AMC, to build two mine warfare support vessels and a hydrographic vessel in WA.

project was expected in the fourth quarter of this year, with the build commencing in the early 2020s at Henderson, he added.

Civmec tour During his AMC visit, Morrison viewed substantial progress on Civmec’s shipbuilding and maintenance facility currently under construction.

Civmec said the $80m facility had risen up from the ground in the six months since Morrison was last on site to witness the erection of the first steel for what will be one of the world’s largest undercover ship assembly halls.

With 53,000 square metres of usable floor area, the hall will boast a crane capacity of 400 tonnes at a height of 40m and 20t at 60m.

It would also be capable of housing complete air warfare destroyers, frigates and offshore patrol vessels (OPVs) for construction or maintenance.

Civmec was awarded the Navy’s $4b OPV program, in contract with Germany’s

“More than $1b had been allocated to deliver the full scope of SEA 1905" The warfare support vessels were a surprise to industry, given Defence had originally intended to replace the existing Huon-class mine hunters in the 2030s.

However, Morrison said their replacement was being brought forward to the mid-2020s, as part of a new mine warfare strategy to be known as SEA 1905.

More than $1b had been allocated to deliver the full scope of SEA 1905, including the building of the two mine warfare support vessels and investment in new mine countermeasure systems, he said.

“This commitment in West Australia adds to the 31 minor war vessels already being built in the state,” he said, in a reference to the Arafura class OPVs and Guardian class PPBs. Morrison also committed to building the hydrographic vessel in WA, flagged last October by then Defence Minister Christopher Pyne as a $250 million project. The vessel is part of Navy’s SEA 2400 hydrographic data collection capability project.

“We will build and acquire a Strategic Military Survey Capability to undertake strategic collection of maritime environmental data as part of the military survey function,” Morrison said.

First pass approval of the hydrographic

Luerssen, in April 2018. The program includes the supply and processing of steel for 12 vessels, with the preparation and profile cutting of steel plates for the first two vessels now being undertaken by Civmec.

Following the build of the first two vessels in South Australia, Civmec will fabricate and build the following 10 vessels in the new ship assembly hall.

Western stronghold Morrison also summarised the ongoing upgrade

and sustainment work in WA for Australia’s existing maritime fleet at Henderson, including: • upgrades to and maintenance of the Anzac frigates, valued at more than $300m in 2019-20.

• Collins class submarine sustainment program ($331m) • Collins class submarine upgrade works ($87m).

The Coalition was also investing about $1.5b on infrastructure associated with the Navy’s expanded maritime fleet and shipbuilding in WA, including: • $367m for the redevelopment of HMAS Stirling to modernise essential infrastructure, with 100 per cent of sub-contractors on the project from the Perth and Rockingham region, representing about 2000 workers.

• $300m for the development of the capability centre to support training for the new Arafura OPVs and Hunter class frigates • $200m for infrastructure to support the Navy’s new replenishment vessels • $670m for development of infrastructure in support of the Hunter class frigates at HMAS Stirling.

Winter 2019 WA WORKS 47

Planner’s Memo

Romilly Madew

Congestion remains an urgent priority The results of a national audit due later this year will help decision makers plan for the future, writes Infrastructure Australia CEO Romilly Madew

I

nfrastructure Australia is the nation’s independent infrastructure advisor. We were established to shine a light on the most pressing opportunities for infrastructure investment and reform, and champion best practice in infrastructure decision-making and delivery.

Inspired by this model, independent infrastructure bodies have now been established in almost all Australian states and territories.

This has supported stronger federal-state collaboration, and driven better performance across infrastructure planning, project development and service delivery.

The latest addition, Infrastructure Western Australia, presents an unparalleled opportunity to improve infrastructure planning and decision-making across the state, and ensure the west continues to reap the benefits of strategic investment in quality infrastructure.

Getting priorities right The Infrastructure Priority List is a consensus list of nationally-significant proposals to address our nation’s critical infrastructure gaps over the next 15 years and meet the challenges of the future.

Two projects in the WA Government’s Metronet rail program were recently added to the priority list after the business cases were assessed by Infrastructure Australia.

The Yanchep Rail Extension was rated as a high priority project and the Thornlie-Cockburn Link as a priority project.

Investment to address the growing urban congestion in Greater Perth has been recognised as an urgent priority by Infrastructure Australia, reflecting the city’s limited public transport options and a tendency towards low-density development which has led to high car use compared with other Australian capital cities Perth’s population has grown strongly over the past 20 years. It is expected to increase from two million people in 2017 to 2.9 million by 2031 and 3.5 million by 2050.

Creating more integrated transport networks will be essential to guard against congestion

48 WA WORKS Winter 2019

and overcrowding and maintain the city’s world-renowned liveability.

In addition to advanced proposals with fully-developed business cases, the priority list identifies critical investment opportunities that require further development.

A number of near-term priorities were identified for WA in the 2019 priority list, including sealing the 276km road between Karratha and Tom Price.

With one of northern WA’s highest traffic volumes and growth rates, the unsealed condition of the Karratha-Tom Price Road constrains mining, freight and tourism opportunities in the region and impacts road safety.

In Perth, replacing the ageing Fremantle Traffic Bridge and improving capacity along the Tonkin Highway are identified as nearterm priorities — both presenting important opportunities to improve road safety and reduce congestion and travel times in rapidly growing areas.

Reflecting the scale of infrastructure investment and construction underway, three WA projects have also progressed off the priority list and into delivery, including the Forrestfield Airport Link, Armadale Road Upgrade, and Mitchell Freeway Extension.

Audit to inform future planning As Australia’s economic activity urbanises and the economy shifts from mining and manufacturing to knowledge-based industries, government and industry have a keen eye on future opportunities for infrastructure investment and reform Due to be published later this year, the 2019 Australian Infrastructure Audit will present a forward-looking view of our infrastructure challenges and opportunities.

It’s the second audit Infrastructure Australia has undertaken, after the first was published in 2015, and includes a broad, cross-sectoral picture of the state of Australian infrastructure and the steps needed to respond to the challenges of population growth, and the opportunities to grow the economy.

It also includes in-depth analysis on efficiency, capacity and capability across the infrastructure sector, with a view to better anticipating and adapting to change, managing risk, and delivering infrastructure that works in the best interests of Australians.

We encourage industry to draw on the audit in their decision-making processes and take part in the stakeholder engagement process that will follow later this year and inform the development of the 2021 Infrastructure Plan.

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 Blast for defence science WA has joined other states with the launch of the Defence Science Centre, which will act as a matchmaker between universities, government and industry to support security and technology development and capability requirements.

Parties involved in the creation of the DCS include Defence West, the Defence Science Technology Group of the Department of Defence and WA’s four public universities including Curtin, ECU, Murdoch and UWA. DSC Acting Director Michele Clement and Defence Industry Minister Melissa Price.

Raw materials talk fest With WA in the hotseat for growth of electric vehicles as a rich source of raw materials needed to manufacture batteries to power them, the State Government has been accepted into one of the International Energy Agency’s hybrid and electric vehicle technology collaboration programs.

Called the Critical Raw Materials for Electric Vehicles (CRM4EV), WA will join Germany, the Republic of Korea, Sweden, the United Kingdom and the United States in the program.

Emerging from the deep WA’s submarine know how will attract national interest with the Submarine Science, Technology and Engineering Conference 2019 (SubSTEC5) to be held in Fremantle from November 18 to 21.

Launching the conference at Curtin University on May 29 — with a 3D visualisation of Australia’s first submarine HMAS AE1 — Defence Issues Minister Paul Papalia said he looked forward to welcoming hundreds of submarine enthusiasts and players from the subsea technology to WA. “We in WA are proud to be the home of submarines of the Australian submarine force. The entire fleet is based here and we take a great pride in the professionalism and the capability of Australia’s submarine force and the fact that it is not only based here but largely sustained here, which is of vital importance and value to WA,” he said.

Visit submarineinstitute.com.

Perth’s cloud expands Global date centre company Equinix finished the $15.6m expansion of its second international business exchange data centre PE2, which provides access to the Vocus-owned Australia Singapore Cable.

The centre means lower latency options for customers such as IMDEX, a mining technology company that enables near real-time analysis for mining companies.

Autonomous rollout

Roborigger does heavy lifting An autonomous lifting device is raising the safety bar on construction sites, allowing riggers and dogmen to control crane loads wirelessly.

Global construction company Multiplex has been using the roborigger, developed by Tensa Equipment, at the site of WA new museum after trialling the design since 2017.

Fortescue Metals Group started the rollout of the first of 38 autonomous trucks at its Cloudbreak minesite in May in what is a significant step to becoming the first iron ore operation in the world to have a fully autonomous haulage fleet.

The Cat 789D model trucks have been fitted with autonomous haulage technology (AHS).

The conversion of Fortescue’s fleet to autonomy across all its mine sites in the Pilbara will see 175 trucks fitted with AHS by mid-2020.

Winter 2019 WA WORKS 49

Granny power Mining’s slow transition to greener power sources will take another step forward this year at one of WA’s biggest and oldest gold operations, writes Stephen Bell

A

fter three decades of mining powered by gas and diesel, Gold Fields’ Granny Smith mine near Laverton is embracing solar energy.

Contractor and supplier Aggreko has started installing an 8MW hybrid power system, which will use more than 20,000 solar panels and battery back-up to supplement the mine’s existing gas power.

It is a leap into the future for Granny Smith, which poured its first gold in 1990, and continues to rank as one of WA’s major producers. The original Granny Smith deposit is depleted and production these days is from the nearby Wallaby project, where workings extend to depths of more than one kilometre.

50 WA WORKS Winter 2019

Gold Fields Executive Vice President Australasia Stuart Mathew says the microgrid is part of the South African company’s push into more sustainable energy generation.

“We are thrilled to reach an agreement with Aggreko for the design, installation and operation of this innovative source of renewable energy which will generate nearly enough power to run the mine’s processing operations,” he says.

Solar power has been slow to make inroads in WA mining, but is expected to be used more often as a hybrid solution in coming years as the technology improves and costs fall further.

The first big installation was in 2016 at Sandfire Resources’ DeGrussa copper mine, while Zenith Energy is currently building a

26MW hybrid diesel/solar power station at Independence Group’s Nova nickel mine.

Mathews says the Granny Smith microgrid will be a “welcome addition to our suite of onsite energy solutions across other operations which will enable us to reduce our carbon footprint”.

The current power station was designed and installed by Aggreko in 2016.

The new hybrid system, combined with a thermal station expansion, will meet the mine’s increased daily power needs of 24.2MW, Gold Fields says.

Of this, 12.2MW will be allocated to Wallaby and the remaining 12MW to the processing plant, associated facilities and mining camp.

Karim Wazni, Managing Director of Aggreko microgrid and storage solutions, says the maximum power required for the mine has increased due to the vent fan and cooling fan loads as the underground workings extend deeper into the Wallaby orebody.

Sun rises on construction Aggreko was awarded the contract in February for the solar/battery facility, and onsite construction is now ramping up.

Wazni told WA Works that early civil works are nearing completion, with roadworks and drilling for the solar structures now underway.

Aggreko is acting as the prime contractor and overall project coordinator and working with subcontractors for various parts of the works, such as civils, mounting of structures and panels.

The workforce is expected to peak at 30 people.

“Aggreko has started installing an 8MW hybrid power system, which will use more than 20,000 solar panels and battery back-up” The solar panels are made in China, Wazni says, with local content provided in the form of labour used to erect the structures, mount the panels, connect them, perform electrical works and commission the hybrid plant.

“This type of work is very labour intensive,” he says. “The current schedule has a portion of the solar and battery fully operational by December 24, 2019.”

While the solar panels will reduce the need to run thermal generators, the 2MW/1MWh battery plant will provide services such as spinning reserve displacement, photovoltaic ramp rate control and transient voltage/frequency support, he says.

Aggreko is installing a self-contained “Y.Cube” lithium battery, including ancillaries such as heating, ventilation and air conditioning,

transformer and fire suppression.

“It comes with a proprietary energy management system that will manage the overall hybrid power plant controls ensuring both high reliability and maximum penetration of solar power to displace gas,” Wazni says.

Aggreko expects the solar-plus-battery system to reduce the mine’s fuel consumption by 10-13 per cent and produce about 18 GWh of clean energy per year.

Alongside Granny Smith, Aggreko says it is installing Y-Cube batteries in several African mining projects.

Winter 2019 WA WORKS 51

Battery industry

Harnessing the power of batteries WA is centre stage in a national plan to grow Australia’s exports of battery-related products, writes Tim Shanahan

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he rapid shift to a renewable energy future is driving a global battery boom never seen before.

In a world with wind power and solar photovoltaics at centre stage, storage technologies will be a cornerstone of future electricity systems and must keep up with the pace of change.

With Australia’s resource-rich lands, industry leadership and research strengths, our country is well placed to play a leading role in developing innovative solutions for how energy is stored and deployed into the future.

WA will be at the centre of the national plan to refine, manufacture and supply materials and components for these batteries. It will house a new R&D consortium of 58 industry, academic and government partners tasked with supporting the nation’s response to these emerging new industries.

In April, the Federal Government announced that the national consortium, led by Curtin University (and including UWA and Murdoch), had been successful in its bid to host the Future Battery Industries Cooperative Research Centre (CRC) here in Perth. The WA State Government seeded the bid with $6 million in funding and the Federal Government committed $25m to

52 WA WORKS Winter 2019

match the $28m committed by other industry, research and government partners.

The Future Battery Industries CRC has a six-year plan to address the gaps in the nation’s capacity to capitalise on the opportunities presented by the battery revolution and ensure Australia creates the tools and technologies necessary for every stage of the international battery value chain.

Tim Shanahan

delivering an estimated $2.5 billion benefit to the economy over the next 15 years.

That is an ambitious objective, but we have already started by building the culture of collaboration that will be needed to match the key industry challenges with the relevant capabilities across our research partners.

In May, we held our first meeting of participants in Perth and attracted 96 representatives from across Australia and beyond, marking the first step to identify the priorities that will guide our six-year research program.

As many of our participants are SMEs, the Future Battery Industries CRC will focus on lending them a critical mass by providing access to larger players and the tools for technology transfer and commercialisation.

We see our role as helping participants, including those companies further down the value chain, to work together to test their ideas in order to deliver research that can grow Australia’s exports of battery industry-related products and technologies, which are in demand around the world.

Ultimately, our aim is to develop new industries, grow exports and create new jobs by addressing the challenges faced by industry and presenting Australia as a globally competitive provider of low-cost, high-quality and technically superior battery materials and technologies.

The Future Battery Industries CRC brings together industry, government and researchers to solve the challenges for the next generation of energy storage systems. And it aims to do this by moving quickly given industry calls for Australia to act within the next five years or risk losing the once-in-a-lifetime opportunity to overseas competitors.

The industry has warned us that there is

“WA will be at the centre of the national plan to refine, manufacture and supply materials” Harnessing new energy materials including lithium, nickel, cobalt, manganese, aluminium, vanadium, and graphite, the consortium aims to expand Australia’s battery minerals and chemicals production.

It will also develop opportunities for specialist battery manufacture; support the deployment of batteries to households, communities and industry; and optimise the circular economy for the use and re-use of battery systems,

an urgent need for Australia to take the lead and we have already started the work to ensure these new businesses — and the jobs they will create — are developed right here, leveraging our natural resources and internationally renowned research skills.

Tim Shanahan is Chair of the Future Battery Industries CRC, which can be contacted via contact@fbicrc.org.au

Energy

Clearer path to LNG work Suppliers will soon have access to a valuable tool for finding more work on big LNG projects across Australia

By Stephen Bell

A

meaty new reference work from the Industry Capability Network will become an essential guide for small and medium enterprises looking to sell their products into the supply chains of major oil and gas companies.

ICN’s Opportunities for small to medium enterprises (SMEs) in operation, maintenance and facilities management of onshore Australian LNG facilities is being updated, with the result to be three times bigger than the 2013 publication.

Funded by major LNG operators Woodside, Chevron, Shell, Inpex and Conoco Phillips, the publication will set the benchmark for listing opportunities in the operations and maintenance of Australian oil and gas facilities, says ICNWA Principal Supply Chain Consultant Linus O’Brien.

“It will provide SMEs with a much clearer picture of who is responsible for the purchasing of goods or service,” O’Brien told WA Works.

“The number of packages expected to be profiled will treble from the first publication to well over 150.

“These packages essentially reflect the information ICN received from the oil and gas operators and the enquiries that ICN has been carrying out over the past five years for the operators of the LNG facilities — and demonstrates the depth and breadth of ICN’s engagement with the sector.

“Prior to the 2013 release, a lot of SMEs were phoning ICN wanting to know who they needed to speak to in Woodside or Chevron to sell their goods or service.

“We knew that it was not the asset operator that they should be contacting — they needed to be talking to the major contractor responsible for the purchase of the goods or service.”

This led to the inaugural publication, which

“A comprehensive list of all the major packages in the operational and maintenance aspects of oil and gas” focused on the pathway for SMEs to connect to opportunities in existing LNG facilities and those that would arise in plants built by the energy majors during the $200 billion LNG construction boom.

It was well received, not only by the oil and gas companies, but also SMEs, as it enabled them to clearly understand where the supply capability would be managed during the LNG operations phase.

“Then, in early 2018, there was a desire by the oil and gas companies to update the publication, as a number of the projects that had been under construction during the first edition were now operating,” O’Brien says.

“The LNG project owners wanted to ensure that Australian SMEs had the most up-to-date information on who will be purchasing the goods and services required by their operating facilities.”

At the time of writing, ICNWA was finalising a draft document for review by the oil and gas operators before listing the document on ICN Gateway to enable all major contractors responsible for the purchase of the goods or service to make themselves known to ICN. ICNWA will then contact the major contractors responsible for the purchase of the goods or service requesting them to identify what items they will outsource for the major packages they have won or are tendering on.

“The outsourced items listed will be the significant area of the updated publication for SMEs to find where to sell their products,” O’Brien says.

Once the information is collated, ICNWA anticipates the final PDF document will be published in August/September.

“SMEs will be able to use the document easily by searching for the name of the item they supply to see whether it’s outsourced by the contractors,” O’Brien says.

“For example, if an SME specialises in oil testing, a search under that title would identify if the item exists and, if so, who is responsible for the purchasing of it.”

“It will be a comprehensive list of all the major packages in the operational and maintenance aspects of oil and gas projects around Australia.

“The publication will enable SMEs to have significant visibility of sub-contract goods and services available in the supply chains of major oil and gas companies.

“A significant step forward for this updated publication is its broadening from just LNG plants to the more general operations and maintenance of oil and gas activities, both onshore and offshore.”

ICNWA is managed by CCI. For more information email linus.obrien@icnwa.org.au.

Winter 2019 WA WORKS 53

Policy Corner

Discussions open on local jobs bill The State Government is keen to get cracking on its goal of creating 150,000 new jobs by 2025

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art of the Government’s plan for meeting its jobs target is to develop and implement a new Local Jobs Bill, which is intended to maximise local content across major private sector resource and infrastructure projects in WA. In turn, the Government is hoping to see more economic benefits flow from major projects into the local economy and create jobs.

No doubt many WA Works readers would love to see more local opportunities from major projects, but it is not yet clear how the new Bill will achieve this and to what extent the benefits of new local content requirements would outweigh the costs.

Strong focus on consultation The Government is moving quickly and has set a very ambitious target to develop and implement the Local Jobs Bill by the end of 2019. Three industry consultation groups will provide input into the Government’s work, with energy, mining and construction industry consultation groups all meeting for the first time in early to mid-June.

Close consultation with industry should help resolve many of the questions surrounding the details of the Bill and subsequent requirements that will be imposed on project proponents, some of which are detailed in this column.

54 WA WORKS Winter 2019

Outlining local content opportunities There are limitations on the State Government’s ability to force local content quotas on private sector projects, so the Local Jobs Bill will likely focus on the monitoring and reporting of local content opportunities.

The Government has already signalled that a key feature of the Bill’s framework will be the use of Skilled Work Agreements, which will “outline a project’s potential employment, skilling and contractual opportunities”. This means a proponent will need to map out a project’s workforce requirements and work packages for scrutiny by the Government as part of the approvals process.

Reporting requirements A main area of focus during the development of the Bill will be to avoid onerous reporting requirements being placed on project proponents.

Major projects exceeding a capital expenditure of $500 million are already subject to local content monitoring and reporting requirements under the Commonwealth Australian’s Job Act 2013.

It is therefore important that any State-based system avoids duplicating reporting requirements under the national regime.

Justin Ashley

It will also be important to ensure that the development of the Bill does not run counter to work progressing under the State Government’s newly-formed Streamline WA, which has prioritised improvements to mining approvals processes as a key area for regulatory reform.

Questions around enforcement and flexibility At this stage it is not clear to what extent the Government would be able to enforce Skilled Work Agreements if a proponent diverges from the initial plan once a project is underway. This raises questions about what information provided under Skilled Work Agreements will be used for.

It is unlikely that a project proponent would have full visibility of their content and skilling requirements for a project until it progresses.

Locking in a Skilled Work Agreement prior to a project commencing could therefore potentially hold a proponent to a level of local content that is not realistic or reasonable. In reality things change, so project proponents will need flexibility to alter their work plan as the needs of a project become clearer.

Share your views CCI will be seeking input from Members on this issue as it progresses. We’d like to hear your thoughts on the proposed Local Jobs Bill, or information about your experience dealing with existing local content regimes such as the WA Industry Participation Strategy and Australian Industry Participation Plan.

We will also be consulting with members via our various policy forums.

Feel free to contact CCI Policy Manager Justin Ashley via justin.ashley@cciwa.com for more information.

Drilling Down

The majors are back exploring

Mincor flags nickel works

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unior company Mincor Resources is mulling new spending at two Kambalda sites as part of a planned restart of its idled nickel mines.

The capital expenditure may include a 1.2-kilometre underground tunnel at the recent Long mine acquisition, Mincor Managing Director David Southam says.

Separately, the company plans to build a box-cut — a small open cut used to provide tunnelling access to underground lodes — at its Cassini discovery.

Mincor shuttered all of its Kambalda nickel mines in early 2016 because of poor market conditions.

But an improved outlook this year — driven by rising demand for the high-purity nickel used in electric vehicle batteries — prompted the company to sign a commercial nickel sales deal with BHP, acquire Long from Independence Group and increase nickel resources at Cassini.

The BHP deal included the right for Mincor to process up to 600,000 tonnes per year of nickel sulphide ore at BHP’s Kambalda nickel concentrator. Mincor raised $23 million in May to pay for Long and provide working capital

to complete a definitive feasibility study (DFS)

by December quarter on restarting Kambalda production.

“We’ve got a huge responsibility to spend that (money) wisely, concentrate on the DFS, early capex potential and some drilling,” Southam told a WA Mining Club lunch.

Mincor is yet to forecast when nickel production will likely resume, however Southam noted that market analysts were “talking about the end of 2020”.

Part of the DFS involved identifying the location and finalising the design for a box-cut at Cassini, further metallurgical test work and underground mine design, he said.

New underground infrastructure might also be developed at Long, which Mincor aimed to consolidate into its other mining operations.

He said there was an approximate 2km space separating Long from Mincor’s other mine assets that had never been explored for nickel.

“So there is exploration upside there.”

“But, also, we can build direct access from Long’s infrastructure to the bottom of Durkin, one of our mines that we’ll be restarting. We would do an underground ramp about 1.2km long.”

$20m Yamarna gold hunt underway Gold Road Resources plans to spend $20 million this year exploring for new discoveries on its huge Yamarna project near the Gruyere gold mine.

The company says it has identified more than 150 drilling targets to the north and south of Gruyere, the $621m gold mine now coming on line after a two-year construction project requiring 3.4 million man-hours.

Gold Road owns 50 per cent of the mine, operated by Gold Fields, and 100 per cent of the Yamarna exploration project.

Chief Executive Duncan Gibbs says about three-quarters of the 2019 Yamarna budget will be spent on the Southern project area, which includes the advanced Gilmour prospect where exploration has encountered a continuous quartz vein with abundant coarse gold.

The best reported Gilmour results to date are 117.8 grams (about 3.8 ounces) of gold per tonne over a 0.6m drill interval and 29.7 g/t over a 1.8m interval.

Other Southern prospects include Bloodwood, Hopwood, Smokebush and Yaffler South.

Gold Road says it is targeting discoveries of more than one million ounces that may be suitable for processing through the new Gruyere plant.

Australia’s mineral industry is going through a “transformational event” because of the revival of greenfields exploration for covered gold and base metal deposits, according to Encounter Managing Director Will Robinson.

Robinson, who recently retired as president of the Association of Mining and Exploration Companies , said he was seeing large multinational companies coming back into Australia in a “big way”.

After many years of relying on acquisitions and mine extensions, “you’ve now got the big companies rushing back into exploration to restock their pipelines”, he told the WA Mining Club lunch.

Australia was receiving a lot of attention during this trend, because the industry was now focused on exploring for metal deposits hidden under ground cover.

“Given the success we’ve had over the last 150 years in the 30 per cent of the country that has outcropping geology, I think there is an enormous opportunity in Australia as the industry goes into that undercover space,” he said.

Encounter had accumulated large land holdings in both the Paterson Range (Pilbara) and Tanami (central Australia) regions, which were “probably the most significant exploration success stories that have happened in Australia in the last five to ten years”, he said.

After months of speculation, Rio Tinto confirmed in February that it had made the “promising” Winu copper discovery in the Paterson Range region of the east Pilbara.

At Tanami, in the Northern Territory, US gold giant Newmont had found millions of ounces of high-grade gold at the Callie project, Robinson said.

And, earlier this year, Melbournebased Newcrest agreed to sole fund 2019 exploration of the Encounter-Newcrest joint venture prospects in the Tanami and West Arunta provinces of central Australia.

Winter 2019 WA WORKS 55

News Bites

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

March On track

Trains listed

Key railway earthworks got underway at Fortescue’s $1.8b Eliwana project, boosting confidence that the company will meet its tight schedule of first ore by late 2020.

Contractor NRW had mobilised on the first 20 kilometres of the project’s 143km railway and started earthworks.

Woodside’s proposal to create a regional LNG production centre on the Burrup Peninsula started generating the first work prospects for oil and gas suppliers.

The Perth-based energy giant listed both the Scarborough and Pluto LNG Train 2 projects on ICN Gateway. The two projects, due to be approved early next year, are expected to have a total cost of about $15b.

Sods turn Construction of Albemarle’s lithium hydroxide plant officially started when Premier Mark McGowan turned the first sod at Kemerton in the South West on March 28.

He was joined by US Ambassador to Australia Arthur Culvahouse and other officials in opening the huge project, forecast to create 500 construction jobs and another 500 once fully operational.

56 WA WORKS Winter 2019

Freeway procurement Procurement for the $215m Mitchell Freeway extension to Romeo Road will begin next year after the State Government gave the green light for construction.

Jointly funded by the WA and Federal governments, the two-year project is expected to begin works late in 2020 with construction aligning with the Yanchep Rail extension.

April Urea prospects New work packages have been advertised for Perdaman’s urea project as head contractor SNC Lavalin tries to sharpen cost estimates for the huge Pilbara venture.

The listings on ICN Gateway were packages for developing one of the world’s largest stream urea plants. Perdaman has invested about $280m to date and says the venture will create more than 2000 jobs during a three-year construction phase.

Station upgrades The race to win the $146m Bayswater Station upgrade contract is heating up, after the State Government received proposals from industry.

A Request for Proposals process, which closed in late May, sought contractors to design and construct the upgrade through a competitive alliance contract. A contract award and construction is set to start by the end of the year.

Bidders on track Transport Minister Rita Saffioti vowed that the two consortia vying to build the McGowan Government’s $1.1b Yanchep extension and Thornlie-Cockburn link project will learn their fates before Christmas.

Construction of the competitive alliance project, regarded as one of WA’s biggest ever package of infrastructure works, will begin this year, she says.

Enfield nearly there Woodside says the $2.7 billion Greater Enfield oil development is on schedule and budget and at the end of the March quarter was 89 per cent built.

Nine of the project’s 12 development wells were complete, with commissioning started of equipment on the Ngujima-Yin Floating Production Offtake and Storage vessel. The FPSO was expected to sail to WA waters before June 30, with commissioning and start-up to follow.

Micro LNG plant The green light for a “microscale” LNG plant at Kwinana is expected later this year, after the State Government committed $10m over the next decade to the research-driven proposal.

The plant, expected to produce 10 tonnes of LNG per day, is part of the University of Western Australia-led LNG Futures Facility.

Golden towers Golden Group is seeking council approvals to develop the first two residential towers for its $3.8b Belmont Park project.

The developer wants to build a 31-storey tower with 250 apartments opposite a 26-storey tower with 213 apartments, valued at a combined $200m.

Services for residents will include coffee shops and a 50-metre, two-lane lap pool with views over the river.

Building prospects Major contractor Lendlease expects that more than 50 subcontractors will be needed to build Curtin University’s new design school.

The construction giant won the contract in April for the $110m specialist learning and teaching facility, which is scheduled to be completed in two years.

Winter 2019 WA WORKS 57

May

A cracking plan Lynas Corporation has fleshed out more details of its planned upgrade of WA rare earths processing infrastructure as part of $500 million capital works program.

However Lynas, which is the biggest rare earths producer outside of China courtesy of its Mt Weld mine near Laverton and a major refinery in Malaysia, is yet to reveal how much of the spending out to 2025 will be in WA versus overseas locations.

Fired up Newmont has brought on line one of Australia’s biggest gold mine power stations after contractor Zenith Energy completed the Tanami construction program ahead of schedule.

Perth-based Zenith says its 62MW Build Own and Operate power station was finished within tight capital constraints given the complexity of the build.

Pipeline of work Maintenance spending on the Dampier to Bunbury natural gas pipeline will remain relatively stable in the first half of next decade, despite a forecast 8 per cent slide in total operating expenditure.

Australian Gas Infrastructure Group (AGIG) lodged a draft access plan for the five years ending December 31, 2025 with state regulator ERA. It predicts $39m will be spent on turbine and gas engine alternator overhauls in the upcoming access period.

More work on Civmec’s horizon New lithium and iron ore contracts helped Civmec grow its order book to $820 million and the Henderson contractor expects to win more “substantial” jobs later this year.

Civmec’s book as at March 31 increased from $540m at the end of December following the award of significant contracts with Albemarle’s lithium hydroxide venture and BHP’s South Flank iron ore project.

Exmouth space boost Defence has completed construction of the 270-tonne rotating dome enclosure and support facilities that will house Australia’s new space surveillance telescope at Exmouth.

Chief of Air Force, Air Marshal Leo Davies says the $97.2 million facility is the first of its type built for Defence and represent a “significant achievement” by Australian industry and Defence personnel.

Badgingarra begins WA’s newest renewables project has come on line after APA Group launched its $315 million Badgingarra wind farm in the Mid West.

Energy Minister Bill Johnston opened the facility in May following a year of construction that was completed earlier this year.

Queens card played Fortescue Metals Group approved its third Pilbara iron ore mine in 12 months after giving the green light to develop the Queens Valley area.

The $417 million (US$287m) mine will require minimal new infrastructure as it is just 15 kilometres from the Kings ore processing facility (OPF) at Fortescue’s Solomon Hub north of Tom Price.

58 WA WORKS Winter 2019

News Bites New Gorgon drilling work begins Chevron’s multibillion-dollar Gorgon Stage Two project has clicked into gear with the start of a substantial drilling campaign by US offshore rig provider Transocean.

The upgrade, approved more than a year ago, will expand an existing subsea gas gathering network to ensure the long-term continuation of gas supply to Chevron’s LNG and domestic gas plants on Barrow Island.

You can bank on it Commonwealth Bank is offering suppliers the chance to get a seat on its panel of contractors performing ongoing commercial and retail construction works.

Sydney-based Commonwealth invited respondents to submit an Expression of Interest to pre-qualify and select suppliers to participate in a future Request for Proposal for the panel renewal.

June Rio builds activity at Winu prospect Rio Tinto has built a significant work program at its Winu copper discovery in the east Pilbara, with 180 people now active on the remote exploration site.

The global major revealed in February that it had made a “promising” copper-gold discovery at Winu in the Paterson Province, having completed more than 13 kilometres of drilling.

Plentiful autumn Engineering contractor SRG Global has enjoyed a fruitful autumn, with a win in June pushing the value of jobs awarded since early April to nearly $300 million.

A three-year, NZ$35m ($33m) contract renewal this month to provide specialist industrial services for Transpower New Zealand, is the latest for the Perth-based company.

Conoco to invest in Darwin battery Oil and gas giant ConocoPhillips is considering offers from contractors to install a world-first battery at its Darwin LNG export venture by next year.

Conoco says the project will see Darwin LNG become the first LNG plant to operate a battery to reduce carbon emissions from power generation, in this instance by a forecast 20 per cent.

Reid Highway widening kicks off A major road project expected to create 400 jobs has started construction in Perth’s north east.

Decmil won a $46 million contract from Main Roads in March for the fourkilometre widening to dual carriageway on Reid Highway, between Altone Road and West Swan Road, and construction of a new bridge.

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.

Winter 2019 WA WORKS 59

60 WA WORKS Winter 2019

The Big Picture In what’s a milestone for the world’s largest floating LNG project, Shell’s Prelude shipped its first cargo in mid-June.

This photograph shows staff aboard the giant 490-metre ship bidding farewell to the Valencia Knutsen LNG tanker, which is bound for Asia.

The remote gas field is 475km north-north east of Broome.

Winter 2019 WA WORKS 61

Commodity Corner

BHP has rosy view on nickel, copper

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HP says nickel and copper are now two of its favoured metals due to the likelihood of significantly increased demand from the ongoing electrification of transport.

The revelation, by BHP chief financial officer Peter Beaven, is good news for the company’s Perth-based Nickel West division, which was recently viewed as a non-core asset.

Beaven said in a strategy presentation that adding project options in copper and nickel sulphides (as opposed to laterites) was likely to be a “sound investment” for the company based on current trends.

West would remain in the portfolio, because of its “high-return potential” as a future growth option.

The company had previously investigated sale options for Nickel West after it was excluded from the assets divested in the 2015 spin-off of South32.

But its view on the division was gradually turned around by rising nickel demand from makers of the heavy-duty lithium ion batteries used in electric vehicles.

Already BHP directs most of its nickel to the battery market, rather than the traditional stainless-steel sector, and has started building

“Nickel West will remain in the portfolio, because of its ‘high-return potential’ ” “Demand will grow and, at the same time, new supply sources will be hard to discover and permit and will be more expensive to develop,” he said.

“Grade decline is an inherent feature of the existing mines, so that just maintaining existing production capacity is a challenge.”

Beaven’s comments echoed those of his boss, BHP Chief Executive Andrew Mackenzie, who told a Barcelona conference in May that Nickel

“So we should continue to add exploration options in these areas.”

While demand for batteries will also drive lithium and, to a lesser extent, cobalt demand, the “abundant supply of the former, and substitution of the latter, reduces the attractiveness of these commodities for us”, Beaven said.

And with steel production growth to remain “marginal”, big-ticket iron ore expansions in the Pilbara were still off the agenda.

“We are unlikely to add significant new capacity in iron ore or metallurgical coal beyond productivity tonnes,” Beaven says.

“We should squeeze the maximum value out of the existing invested capital.”

a nickel sulphate plant at Kwinana.

Beaven identified “finding and developing more nickel resources” in WA as one of four strategic options for BHP, including a copper expansion at Olympic Dam in South Australia, developing overseas oil projects and investing in gas close to existing downstream LNG facilities.

“We have options in copper and oil, but we need more and we are interested in adding more nickel sulphide resource to our portfolio,” he said.

Iron ore price spurt may run out of steam The fear of further Brazilian supply disruptions in the wake of Vale’s tailings dam collapse in January won’t be enough to prevent global iron ore prices sliding in the second half of this year, according to Morgan Stanley.

The investment bank noted spot iron ore prices broke above $US100 a tonne in May, driven by falling iron ore port stocks, strong Chinese demand and the fear of further supply suspensions in Brazil due to the possible risks at Vale’s Gongo Soco mine dam.

However, Morgan Stanley believed the iron ore price was close to peaking, as shipments from Brazil had bounced and, “we expect China’s steel output to take a breather”.

China’s iron ore port stocks, a key alternative to Brazilian supply, had fallen by about 21 million tonnes since early April to 128Mt by late May. “The port stocks can’t fall much further than 100Mt though, and we believe the draw on port stocks will ease in 2H19,” the bank said in a research note.

“We expect the iron ore price (to) come down in 2H19.

“However, we flag upside risk to our 2H19 price forecast ($US78/t), as the current market deficit will narrow, but not disappear, on modestly improving supply and easing Chinese demand.”

62 WA WORKS Winter 2019

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North West Shelf Chandon Pyxis Pluto Xena Brunello

Jansz–Io Scarborough

Chrysaor/Dionysus Julimar Achilles Satyr

Gorgon Spar

Major Resource Projects

Hermes Athena Persephone Lambert Angel Searipple Cossack Rankin North Rankin Perseus Wanaea Keast Goodwyn Sculptor Tidepole Lady Nora Dockrell Wheatstone Pemberton Iago Reindeer

May 2019

Project labels:

Projects operating or currently under development with an actual or anticipated value of production greater than A$10 Million are shown in blue Proposed or potential projects with a capital expenditure greater than A$20 Million are shown in red

Wandoo

See West Tryal Rocks Barrow Island enlargement John Brookes

Stag

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

Yara Pilbara Fertilisers NWSV LNG Pluto LNG Yara Pilbara Nitrates Anketell Dampier

Halyard

Concerto/Ichthys

Dampier Salt

Cape Preston

Cape Preston East Cape Lambert Maitland River Devil Creek Gas Radio Hill Plant

Sino Iron

Torosa Brecknock

Whundo Zn Cu Balmoral South

Prelude Ichthys

Blacktip

Cape Bougainville Gwydion

Calliance

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

Ashburton North

Onslow

Tubridgi Gas Storage

Exmouth

Cape Range Lst

0

50

Onslow Salt Wheatstone LNG Macedon Gas

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

Sorby Hills Pb Zn Cu Ord Stage 2

Wyndham

Barrow Island Mesa A - Warramboo

Middle Robe Mesas Mesa J Bambra Wonnich Wonnich Deep Linda Lee Bungaroo CreekRose Harriet BungarooMonty South Josephine Baker Ginger Agincourt Simpson West Pilbara Barrow I South Plato Little Sandy Double Island Pedirka Gorgon LNG Victoria Barrow Island West Cycad Eliwana

Ord Stage 1 KUNUNURRA

Cockatoo Island Irvine Island Koolan Island

10 km

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

Derby

Browse LNG Precinct

Thunderbird

Broome

L Channel – India Bore

Ungani

Duchess–Paradise

Paulsens

Savannah North Savannah McIntosh Gr Copernicus Panton Pt Pd HALLS CREEK Brockman REE Nb Zr

Koongie Park Zn Cu Pb Lamboo Kapok West Pb Zn Ag

Dorado

Commodities Ag........... Silver 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

Browns Range REE

Admiral Bay Zn Pb

Port Hedland

Cummins Range REE

Asian Renewable Energy Hub wind & solar Citadel Au Cu Woodie Woodie Mn

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

Nifty Cu

Maroochydore Cu Co Kintyre

Yeneena Cu

Lake Mackay K

Nicholas Downs Mn

See North West Shelf enlargement

Lake Disappointment K

See Pilbara enlargement

Yangibana REE Cape Cuvier

Mineral symbols

Precious mineral

CARNARVON

Shark Bay Salt

Dmd

Coburn

Precious metal

Au (or as shown)

Steel alloy metal

Ni (or as shown)

Speciality metal

Ti–Zr (or as shown)

Base metal Iron Alumina

Port Gregory Grt

All sites are bauxite

Butcherbird Mn

Lake MacLeod Gp Lake MacLeod Salt

Balline Grt

Geraldton

Ilgarari Cu

Abra Pb Cu Zn

Beyondie K

Plutonic Dome Horseshoe Lights Cu Au Ag Plutonic Fortnum Hermes Glenburgh Thaduna Cu Ag Telecom Hill Yalbra Gr 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 Gabanintha/AV Gidgee Cue JV – Hollandaire Cu Au Ag Kathleen Valley Li Ta V Ti Cliffs Big Bell Barrambie Bronzewing Yakabindie South Fingall V Ti Fe 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

Infrastructure

Power plant Irrigation / water / desalination Port

Edna May Silver Knight Nova–Bollinger

Collgar wind

PERTH Fremantle

Wickepin Kln

Bunbury

See Goldfields enlargement

Cosmic Boy Concentrator Salmon Gums

Katanning Mt Cattlin Li Ta

Ravensthorpe

Great Southern Au Cu See South West / Mid West Coastal enlargement

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

64 WA WORKS Winter 2019

EUCLA

Tampia

Southdown

Albany & Grasmere wind

Albany

Munglinup Gr

Esperance

Scaddan

0

100

200

Kilometres

300

400

Major Resource Projects May 2019

Reindeer Port Hedland Salt

Wandoo

Port Hedland

Stag Yara Pilbara Fertilisers NWSV LNG Pluto LNG Yara Pilbara Nitrates

Dampier

Cape Preston

Dampier Salt Cape Preston East Devil Creek Gas

Maitland River Sino Iron

Ridley Mag

Cape Lambert Anketell Cape Lambert Sherlock Bay

Precious metal

Balmoral South

Whim Creek Cu Pilgangoora Li Ta Li Ta Wodgina Li

PIOP/Flinders

Serenity

Roy Hill

Koodaideri

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

Marandoo

Infrastructure

100

Kilometres

Prairie Downs Zn Pb Ag

Projects operating or currently under development with an actual or anticipated value of production greater than A$10 Million are shown in blue Proposed or potential projects with a capital expenditure greater than A$20 Million are shown in red

Deflector Au Cu Ag Golden Grove Cu Zn Pb

Shine Golden Dragon

Greenough River solar

Mt Mulgine W

Karara Mag

Oxley K

Cliff Head

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

Mungada East Extension

Irwin River

See Dongara enlargement

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

Narngulu synthetic rutile Alinta–Walkaway wind Mumbida wind

Power plant Irrigation / water / desalination Port

Ophthalmia Wonmunna Hope Downs 4 West Angelas 31 24–25 Wheelarra JV Giles Mini Mt Whaleback Davidson Creek NEWMAN 35 17–18 Jimblebar Robertson Range

PARABURDOO Turee Syncline Western Range Eastern Range Paraburdoo Channar

Oakajee

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

Christmas Creek

Cloud Break

Hardey

Mineral separation Geraldton brick

Petroleum symbols Mesa – Ant Hill Mn

Kings

Western Turner Syncline TOM PRICE Tom Price

Rocklea CID

Geraldton

Coal and lignite Industrial mineral Processing plant

Big Hill W

Mulga Downs

Silvergrass

Brockman 4

50

All sites are bauxite

Nullagine CID

Investigator

Weelumurra Firetail

Beasley River

0

Base metal Iron Alumina

Nullagine

Caliwingina

Eliwana

Pilbara

Ti–Zr (or as shown)

Corunna Downs

Nammuldi

Paulsens

Ni (or as shown)

Speciality metal

McPhee Creek

PANNAWONICA

Homestead

Spinifex Ridge Mo Cu

Miralga Creek

Mt Webber

West Pilbara

Steel alloy metal

Sulphur Springs Zn Cu Pb MARBLE BAR Iron Bridge Mag Warrawoona

Mardie Salt K

Middle Robe Mesas Mesa J Mesa A – Warramboo Bungaroo Creek Bungaroo South

Rothsay Magnetite Range

Three Springs Tlc

0

Goldfields 50

Extension Hill Mag

Odysseus Bellevue

Lawlers Agnew–Emu

Darlot

Vivien

Waitsia Centauri 1

Dongara

Warradarge wind

Xyris South JURIEN BAY Badgingarra wind

Dandaragan K Phos

Emu Downs wind and solar Atlas Cooljarloo/Tronox

Moora Silica Waddi wind

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

Dongara 5 km

Malaga brick

PERTH

50 Kilometres

Windarra

Murrin North Mt Morgans NiWest Wallaby Murrin South

Sons of Gwalia Mt Bevan

Burtville Mt Weld Phos Mt Weld REE

Murrin Murrin

Mt Mason

Sunrise Dam Red October Lake Carey Second Fortune

Ulysses

Mt Ida

Calingiri Cu Mo Ag Au

Deep South Darling Range Chandala mineral separation and synthetic rutile NORTHAM Felicitas Dana Kln Fortuna Caversham tile Middle Swan brick Midland brick Airport brick

Lake Giles

Deception Windarling

Meckering Kln Mt Jackson

Highway Davyhurst

Marda

Armadale brick Cardup brick Keysbrook Huntly

Pinjarra Alumina Boddington Au Cu Marradong Willowdale

Koolyanobbing

Athena Corinthia

SOUTHERN CROSS Marvel Loch

Saddleback

Kemerton Sisd Titanium pigment Worsley Alumina Bluewaters 1–2 Collie Bunbury Premier Ewington Cristal mineral separation Muja Doral mineral separation Capel North synthetic rutile Yoganup Extended Wonnerup Wonnerup North Wonnerup South Tutunup Yoongarillup 100 Ta Greenbushes Li Ta Sn

Comet Vale Goongarrie Scotia Siberia

Sandy Ridge Kln

Fremantle

Wagerup Alumina

Leonora/Kin LEONORA

Mt Alexander

Tarantula Cadoux Kln Dongara Redback Beharra Springs

Southern Seawater desalination Lithium hydroxide Silicon smelter Chlor alkali

0

King of the Hills

Mt Forrest Cashmere Downs

Yandin wind

Neerabup/Newgen

Ben Hur – Epsilon

Bentley Zn Pb Cu

Mondarra Gas Storage

Jingemia

Yerecoin

Kwinana–Rockingham

Garden Well & Rosemont

Thunderbox

Eneabba/Iluka

Boonanarring

Moolart Well

Rosie

Leinster

100

Kilometres

Eneabba/Sheffield

Cataby

Ag........... Silver Au........... Gold 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

Au (or as shown)

Radio Hill Plant Whundo Zn Cu

Commodities

Mineral symbols

Balla Balla Salt Creek Zn Cu Pb Balla Balla Fe V Ti

Karari

Bardoc

Ora Banda

Lindsays Silver Swan

Pinnacles Atlas–Kalpini

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

Nevoria

Lanfranchi Miitel Mariners

Bald Hill Li Ta

Polar Bear Pioneer Dome Earl Grey Li

Mt Thirsty Lake Johnston

Flat Rock wind New Morning

Flying Fox Spotted Quoll Cosmic Boy Concentrator

NORSEMAN Mt Henry

Winter 2019 WA WORKS 65

Done and dusted

Aerison lands key nickel job Aerison expects to create 200 local jobs at Kwinana after winning a major construction role on BHP’s landmark nickel sulphate project.

The contractor confirmed it had won the structural, mechanical, piping and electrical instrumentation (SMPE&I) job from BHP Nickel West in early May. It is a high-profile role for West Perth-based Aerison, which will be assisting BHP’s push into the battery metals market via the new plant, which is an add-on to the mining giant’s Kwinana nickel refinery.

“The 100,000

tonnes per annum facility would begin production in April 2019” BHP plans to export the nickel sulphate — a key component of the high-capacity lithium ion batteries used in electric vehicles — to the global battery manufacturing supply chain.

BHP approved the US$43 million (A$61m) plant in August 2017, saying the 100,000 tonnes per annum facility would begin production in April 2019.

The company is yet to provide any revised production or cost forecasts, although WA Works understands the scope of the project has changed markedly since 2017.

Aerison, an owner-operated firm with an existing workforce of about 620, says it self-performs design, fabrication, installation and commissioning for projects in the mining, oil and gas and infrastructure sectors.

66 WA WORKS Winter 2019

More Koodaideri wins for NRW

R

io Tinto has rolled out two more contracts for its $3.8 billion Koodaideri iron ore project, with NRW winning work worth a combined $155 million.

The $137m southern rail earthworks job involves construction of about 73km of new rail embankment and associated works, including a 44km access road along the rail alignment connecting the mine to the Great Northern Highway.

The contract, expected to run for 70 weeks from August, will require about 300 construction workers.

It continues NRW’s rich vein of iron ore contract wins of late, coming on top of a current $65m earthworks job for the Koodaideri

plant, and a $62m job for initial earth, road and drainage works at Fortescue’s Eliwana rail project.

The second contract — worth $18m — went to NRW’s RCR Mining Technologies division for equipment supply, including three large apron feeders, 11 slide gates and two belt feeders for Koodaideri.

Koodaideri is about 35km from Rio Tinto’s Yandicoogina mine site and about 110km from Newman.

The first phase of the mine was approved in November, with construction starting earlier this year under the guidance of Worley, the engineering, procurement and construction management contractor.

Key roles for Clough

P

erth-based engineering group Clough says its joint venture with Spain’s Acciona won a civil works contract for building the northern rail formation at Koodaideri in the east Pilbara.

Clough Managing Director Peter Bennett says the contract execution will create “more than 200 new jobs”, with the scope including 100km of rail formation earthworks, culverts, bridge construction, access roads and level crossings.

To allow the transportation of iron ore product to either Dampier or Cape Lambert, the project requires a 170km rail spur to connect Koodaideri to Rio’s existing rail network, just south of Lyre Siding at Numbat.

Separately, Pindan is building a new accommodation camp at Koodaideri in a

deal worth $45 million.

Site construction works began in April, following the contract approval in November.

The greenfield development, forecast to set new WA mining benchmarks in automation, data analytics and machine learning, will initially be developed with an annual capacity of 43 million tonnes.

Koodaideri is being designed to run automated trucks and drills and is described by Rio as its first “intelligent” mine.

First iron ore from the operation is expected in 2021.

Clough, meanwhile, is rapidly gaining traction in the state’s broader iron ore construction boom, having won non-process and ore handling infrastructure contracts on BHP’s $5b South Flank project.

Done and dusted

Quay tower for Chevron Construction of Chevron’s new Australian headquarters at Elizabeth Quay is expected to kick off mid next year, generating a thousand construction jobs.

Canadian asset manager Brookfield agreed to buy the vacant block on the corner of The Esplanade and Barrack Street from Chevron in early May. It will lease back most of the 29-storey tower once it is complete in 2023.

It is a welcome fillip for Perth’s inner-city construction sector which has struggled to regain momentum following years of high commercial vacancy rates after the end of the resources boom.

Multiplex is expected to build the new tower at a cost of $360 million. The total value of the project on completion is estimated at $800 million-plus, according to a Brookfield spokesperson.

The Metropolitan Redevelopment Authority (MRA) granted Chevron development approval for the tower in December.

The tower will comprise 54,000 sq m and house about 3000 people.

In addition to construction starting on the Tower, Brookfield says it is continuing planning and development on Lots 5 and 6 Elizabeth Quay.

Armadale Road contractor named

$60m of potash contracts

W

A’s first commercial sulphate of potash (SOP) fertiliser project looks ready to bloom after Kalium Lakes awarded more than $60 million of contracts.

“The contracts allow commencement of early works with the full scope subject to a FID” The contracts were for the engineering, procurement, construction management (EPCM) and commissioning associated with a purification

plant for Kalium’s $159m Beyondie project, south-east of Newman in the Pilbara.

Perth-based Kalium says the contracts, which were announced in May, allow commencement of early works with the full scope subject to a Final Investment Decision (FID) due by June 30.

The contracts confirm the 15-month construction schedule post FID, followed by a commissioning and ramp up period, it says.

Kalium Chief Development Officer Rudolph van Niekerk believes the company has selected the right partners to deliver each of the project ingredients.

Kalium is one of several juniors seeking to build (SOP) projects, which rely on large brine lakes and solar evaporation to produce the high-end fertiliser.

SOP is used to cultivate fruits, vegetables, berries, potatoes, beans, cocoa, tobacco and tree nuts.

A major $237 million road project in Perth’s south-east has moved a step closer after Main Roads entered final negotiations with the consortium of Laing O’Rourke and BG&E for construction and delivery of the Armadale Road to North Lake Road Bridge project.

It follows a competitive tendering process carried over the nine months prior to the announcement in May, with an alliance agreement expected to be signed upon conclusion of the negotiation period.

The overall project also involves the construction of free-flowing lanes on Armadale Road through Solomon Road and Tapper Road intersections with grade separated roundabouts.

Armadale Road will pass beneath Solomon Road in a trench structure and, due to high local groundwater levels, Armadale Road will pass over Tapper Road.

Other project works will include: • north-facing on and off ramps at Kwinana Freeway • collector-distributor roads on both sides of the Kwinana Freeway from Berrigan Drive to Armadale Road • modifications to the existing North Lake Road and Midgegooroo Avenue signalised intersection.

Winter 2019 WA WORKS 67

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

W

e animals are sick and tired of elections and you probably

reminder that the colonial period ended over a century ago might be a

are too. The recent Federal campaign went on for at least

good idea. Well, perhaps that is a bush story for another day.

six months. Surely it is time for four-year terms with a fixed election date. Western Australia already has that as

As for the local economy these should be better times. Export markets are better than they have been for some time, but both households and business are struggling. Mining might be doing well, but jobs are being

does some other states.

The voting system is also far too complex and too easily manipulated.

lost in the more labour-intensive housing, retail and hospitality sectors.

The Senate ballot paper was almost a metre wide and preferential voting

An inner-city Possum tells us he has never seen so many homeless

forced people to cast a vote for candidates and parties that they simply

people on Perth streets as there are now. The Black Swan says it feels

didn’t want to. The wise Owl points out that if voters do not understand

like we are drifting. Let’s hope not.

the system and cannot vote according to their true wishes, then that is

Meanwhile, keep on eating Termites and White Ants. They are the biodiversity we could do without.

hardly good for our democracy.

In the animal world we each get one vote and the critter with the most votes gets to rule the forest. Even the Wombats understand our system.

And you humans reckon you are the smart ones!

THE ECHIDNA, June 2019

The other thing is that this was supposed to be a Federal election, yet most of the campaigning was done on state issues such as schools,

Department of Jobs, Tourism, Science and Innovation

hospitals, roads, parks and police. At least in the forest we know which territory, says WA should do the same.

As to the result, Scott pulled off a blinder. Even the Owl didn’t pick it. The media Rabbits reckon they could see it coming, but that was only after the final votes came in. That’s why none of us listen to the Rabbits any more.

For Scott, he is now Prime Minister in his own right with the authority of having won an unlikely election victory. He campaigned well and the credit is his. The downside is his Cabinet is inexperienced with the retirement of some of the best players.

The Magpies have promised to help out by swooping that baseball cap off Scott’s head every time he steps outside. The cap is not a good look for the Prime Minister of a top 20 country. As for Bill, he has almost been forgotten. Politics is a tough and unforgiving game.

The other losers are big business, though they probably don’t realise it. They have lost favour with all sides of politics.

The banks still have a long way to go in repairing their reputation. The Cane Toad says selling services to dead people is un-Australian, though that is a bit rich coming from a Cane Toad. The gas industry is the world’s biggest exporter, yet it fails to do anything about the east coast gas shortage. They just need to fix it.

Department of Primary Industries and Regional Development

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animals are responsible for what. The Crocodile, who closely guards his

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Collie Futures Industry Development Fund Up to $2 million in matched funding per industry-led project is available to support initiatives that can demonstrate a positive impact on the local economy and create jobs.

Collie Futures Small Grants Program Grants of up to $100,000 are available to businesses and not-for-profit organisations for initiatives that will support economic growth.

Closer to home, the mining industry might be wondering why it is no longer so popular with young people. The Owl suggests they buy a mirror.

And for some, a gentle

68 WA WORKS Winter 2019

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70 WA WORKS Winter 2019