Australian Mining December 2014

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COMMENT

LOOKING AHEAD WHAT WILL MINING’S NEW YEAR’S RESOLUTIONS BE?

COLE LATIMER

ozmining@cirrusmedia.com.au

ASSOCIATE PUBLISHER MARTIN SINCLAIR Email: martin.sinclair@cirrusmedia.com.au EDITOR COLE LATIMER Tel: (02) 8484 0652 Email: ozmining@cirrusmedia.com.au JOURNALISTS VICKY VALIDAKIS Tel: (02) 8484 0964 Email: vicky.validakis@cirrusmedia.com.au BRENT BALINSKI Tel: (02) 8484 0680 Email: brent.balinski@cirrusmedia.com.au BEN HAGEMANN Tel: (02) 8484 0884 Email: ben.hagemann@cirrusmedia.com.au

W

ell here we are, the latest edition for 2014, and I for one am glad that this year is over and done with.

It has been one plagued with mining accidents, job cuts, mine closures, and a series of constantly falling commodity prices.

In short: not a good year at all.

But to be fair, there were some bright points for the industry, such as the repealing of both the carbon and the mining tax, which removed some of the financial burden currently existing for smaller miners, although the taxes didn’t really hit the major miners’ bottom lines.

However I doubt the thousands of workers who have lost their jobs this year would be feeling overjoyed at these companies’ still-strong balance sheets.

As usual the fallout affects the people on the frontline, and many miners at the coalface, both literally and figuratively, paid the price for poor decisions made during the boom times.

Those working in support services actually bore the brunt of much of this, with the majority of job losses coming from this area.

As we move in to a new year, now is not the time to dwell on these losses, but instead the time to look forward to next year.

Because mining is not coming to an end, despite the constant message that the industry GROUP SALES MANAGER TIM RICHARDS Tel: (02) 8484 0829 Mob: 0420 550 799 Email: tim.richards@cirrusmedia.com.au KEY ACCOUNT MANAGER SHARON AMOS Tel: (07) 3261 8857 Fax: (07) 3261 8347 Mob: 0417 072 625 Email: sharon.amos@cirrusmedia.com.au SOUTH AFRICA BOB STEPHEN Stephen Marketing PO Box 75, Tarlton, Gauteng 1749, South Africa Tel: 27(011) 952 1721 Fax: 27(011) 952 1607 USA JONATHAN SISMEY Cirrus Media 24th Floor, 125 Park Avenue, New York, NY 10017 Tel: (1) 212 370 7445 Fax: (1) 212 370 7441 Email: jsismey@ix.netcom.com

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is dead in much of the media.

The simple fact is that it has just moved into a new phase of business.

The days of huge investments, capital equipment purchases, excessive wages, the “if its broke, just buy a new one” mentality.

That is all over now.

Now the focus from 2015 onwards is efficiency, automation, and productivity.

Productivity will be the key looking forward, as labour productivity rates have been awful for the industry, and actually slipping consistently over the last decade or so.

According to a recent report by Ernst & Young mining labour productivity has declined by about 50 per cent since 2001, whereas prior to then it was increasing at a faster pace than other sectors.

So now mining can take this slow down to change tack, and bring the focus back on productivity, and instead of looking towards being the biggest they can instead look towards being the best, and getting the best costs per tonne, or ounce, or pound.

2015 is a new year, and hopefully it can be the start of a new era of higher productivity, more efficient processes, and a return to profitability.

Cheers, Cole

LARRY ARTHUR Cirrus Media Suite 203, 3700 Campus Drive, Newport Beach, CA 92660 Tel: (1) 949 756 1057 Fax: (1) 949 756 2514 Email: lharthur@ix.netcom.com GRAPHIC DESIGNER DAVE ASHLEY PRODUCTION CO-ORDINATOR TRACY ENGLE Tel: (02) 8484 0707 Fax: (02) 8484 0966 SUBSCRIPTION RATES Australia (surface mail) $140.00 (incl GST) New Zealand A$148.00 Overseas A$156.00 READER SERVICES 1300 360 126

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DECEMBER 2014

On the front cover of this latest issue for the year we’ve featured, rather appropriately, the sun rising over Anglo Gold’s Sunrise Dam gold mine. In this edition we’ve looked deep into the forecast for the coming year for the major metals, such as iron ore, gold, nickel, zinc, and copper, and for the first time we expand this outlook to include the energy sector, i.e. coal and oil and gas.

We’ve also examined the ANU divestment saga, and tried to uncover the truth behind much of the confusion, whilst also giving a round up of the ongoing WA governmental inquiry into FIFO mental health.

CIRRUS MEDIA Tower 2, Level 3, 475 Victoria Avenue, Chatswood, NSW 2067 Australia Locked Bag 4700, Chatswood Delivery Centre, NSW 2067, Australia Tel: (02) 8484 0888 Fax: (02) 8484 0633 ABN 80 132 719 861 ISSN 0004-976X www.cirrusmedia.com.au © Copyright Cirrus Media, 2014 All rights reserved. No part of the publication may be reproduced or copied in any form or by any means without the written permission of the publisher.

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AUSTRALIANMINING

FRONT COVER

Average Net Distribution Period ending Sept 2014 8,047 PRINTED BY BLUESTAR PRINT 83 Derby Street, Silverwater, NSW 2128 Tel: (02) 9748 3411 Published 12 issues a year

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CONTENTS

AUTOMATION

THE YEAR IN REVIEW

10-11

A LOOK BACK AT 2014 The story of mining

28-29

THE SIX STUMBLING BLOCKS IN AUTOMATION The steps for easier automation implementation

MINING SOFTWARE

30-31

RIDING THE CYCLE OF MINING EVOLUTION Better design simulations

METALS OUTLOOK 2015

12-22

THE FORECAST FOR MINING IN 2015 How will metals fare next year?

FINANCE

32-35

THE ANU DIVESTMENT SAGA The why and how of ANU’s decision

ENERGY OUTLOOK 2014

24-25

COAL, OIL AND GAS IN FOCUS Powering our economy

HYDRAULICS & PNEUMATICS

FIFO

26

THE CHANGING FACE OF FIFO Mental health in focus

36

NEW TENSIONING SYSTEMS Confronting fatigue issues in bolt tightening

REGULARS

INDUSTRIAL COMMENT

6

NEWS

8

PRODUCT SHOWCASE AUSTRALIANMINING

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38-43

DECEMBER 2014

JOBS

44-45

EVENTS

46

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INDUSTRIAL COMMENT

WHY ISN’T AUSTRALIA SIGNING UP TO MINING REVENUE TRANSPARENCY? IS IT TIME THAT AUSTRALIA JOINED THE EITI COALITION, OR IS IT NOT NECESSARY? THE UNIVERSITY OF SYDNEY’S STEPHEN MILLS WRITES.

I

t’s a far-fromperfect instrument of global governance.

But as the Extractive Industries Transparency Initiative (EITI) coalition celebrates its 12th birthday, it can point to steadily increasing membership and dialogue between countries, mining companies and NGOs. Regrettably, Australia, with one of the world’s largest mining economies, has still not committed to joining the 48 other nations working on EITI disclosure. This is despite the obvious benefits that greater transparency could deliver to all Australians as they confront deep-seated disputes about mining revenues, taxation, royalties and land use.

With the looming deadline of the Brisbane G20 meeting, the Abbott government is considering a “hybrid” model of EITI implementation. This may – or may not – satisfy the stringent disclosure standards imposed by the global transparency movement.

EITI was the brainchild of then-British prime minister Tony Blair. It was launched in 2002 as a new tool to help tackle the “resource curse”: the phenomenon of resource-rich societies that actually become poorer, more unstable and more corrupt as

mining extraction takes place.

Revenue transparency would, it was hoped, provide civil society with the financial data previously concealed within corporate boardrooms and government treasuries.

Since then, 31 countries have started publishing annual “compliant” EITI reports. Another 17 countries are “candidates”, trialling the process and awaiting formal compliance status granted by the EITI board.

Iron ore being transported in Liberia, one of EITI’s success stories. Flickr/jbdodane, CC BY One of EITI’s biggest success stories is Liberia. The tiny poor West African country, scene of a horrible 15-year civil war and now struggling against the devastation of Ebola, is an EITI giant. One of the first compliant countries in the world, Liberia has completed five successive years of EITI reporting. The latest round involved 80 companies disclosing payments of more than $US100 million.

EITI in Liberia has strengthened civil society, embedded transparency in the legal system, exposed improper awarding of contracts and used innovative infographics to combat illiteracy and promote wide public understanding of resource revenues.

This month’s EITI board

meeting in Myanmar accepted Chad and Indonesia as compliant. The UK was accepted as a “candidate”. Its involvement is a watershed, as EITI membership now extends beyond the developing “south” to include the developed “north” alongside Norway and the United States.

However, Australia is lagging.

When the Gillard government announced in 2011 that Australia would conduct an EITI “pilot”, this was greeted as a likely prelude to full implementation. But that pilot has only just been completed.

Little progress has been made since Australia committed to piloting EITI at the 2011 Paris Conference. Flickr/The EITI, CC BY-SA During the past three years, EITI standards have become more stringent while Australian enthusiasm seems to have cooled.

The pilot was conducted under an MSG convened by the Department of Industry and with representatives of federal and state governments, major mining companies and civil society organisations. The MSG meetings were confidential, save for a grandly titled “communique” issued after each gathering.

The final communique, issued in February 2014, revealed what appears to be a convenient compromise. The AUSTRALIANMINING

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DECEMBER 2014

MSG recommended Australia adopt a “hybrid” model: company payments would not be annually reconciled but would be subject to spot checking in a “statistically valid sample”.

But will a ‘hybrid’ model compromise the EITI? The MSG hopes this will be acceptable under EITI rules, though this is not certain. The hybrid concept seems driven by confidence that Australia’s financial and governance arrangements are already so robust that further reporting would be unnecessary.

And, of course, as an Industry Department spokesman reminded me, “the Australian government remains committed to reducing the burden of regulation on Australian businesses”, as well as to open and transparent government.

A local coalition of NGOs under the banner Publish What You Pay has called on the government to “show leadership on extractive industry transparency” by committing to implement EITI. One member of Australia’s MSG, Oxfam’s Serena Lilywhite, said Australian candidacy of EITI would: “not only send a strong signal to other governments that it is serious about transparency and accountability in the extractive industries, but it would also be better placed

to assist with implementation by our neighbours in the Asia-Pacific.”

Beyond these foreign policy goals, Australian implementation would deliver significant domestic benefits. Another MSG member, CAER’s Julia Leske, said: “Full implementation would help Australians better understand how we benefit from the extraction of our finite natural resources.”

Leske did not spell it out, but this point merits underlining.

As the spat between Western Australian Premier Colin Barnett and mining giants BHP Billiton and Rio Tinto shows, disputes about the “right” levels of production, cost and taxation of mineral commodities are not confined to developing economies.

Many such issues confront Australian policy and politics.

These include the Rudd government’s failed minerals “super tax”; the allegedly corrupt dealings in relation to Hunter Valley coal mines; WA’s “royalties for regions” program and its claims of unfair distribution of GST revenues; and land use disputes between farmers and coal seam gas producers.

Transparent disclosure of mining revenues and taxation receipts would greatly improve public debate on such issues. AM

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NEWS

THE LATEST MINING NEWS AND SAFETY AUSTRALIAN MINING PRESENTS THE LATEST NEWS AND SAFETY AFFECTING YOU FROM THE BOARDROOM TO THE MINE AND EVERYWHERE IN BETWEEN. VISIT WWW.MININGAUSTRALIA.COM.AU TO KEEP UP TO DATE WITH WHAT IS HAPPENING. AUSTRALIA TO BEGIN GRAPHITE PRODUCTION IN SA Australia’s only operating graphite mine has reopened today for the first time since its closure in 1993.

The Uley Mine near Port Lincoln, South Australia, is operated by Valence Industries who have been developing the mine and stockpiling graphite ready for processing.

The mine was in production intermittently since discovery of the mineral there in the 1920s, but was forced to close in 1993 after price slumps were caused by Chinese oversupply of the global graphite market.

With processing plant now fully refurbished and commissioned, Phase 1 of production will process 10,900 tonnes of stockpiled graphite left behind by the 1993 closure.

This will be followed by processing of newly mined graphite from Uley Pit 2.

Prior to the closure Uley produced approximately 14,000 tonnes of graphite per year, but now the plant will be able to produce 29,000 tonnes per year to meet demands set by several Memoranda of Understanding over the next two to three years.

The mine is currently estimated to contain 360,000 tonnes of graphite, and employs 30 people per year, although 60 more will be hired in 2015 as Phase 2 comes online, bringing the total to 90 employees.

A revised feasibility study for Phase 2 is expected by the end of the year, which will include a new open pit and a new processing plant worth $35 million to construct, which will ramp total production up to 50,000 tonnes per year.

IAN MACDONALD FACING PROSECUTION OVER DOYLES CREEK LICENCES Former disgraced NSW resources minister Ian Macdonald is facing prosecution following the ICAC inquiry into illegal mining licences being granted.

Macdonald was found to have acted corruptly over the approval of

a number of coal licencefollowing an ICAC inquiry last year.

The Independent Commission Against Corruption carried out Operation Acacia, the investigation into the Doyles Creek coal exploration tenement approved by Macdonald to a company headed by former Construction Forestry Mining and Energy Union head John Maitland and other businessmen.

It found that Macdonald introduced legislation that not only over ruled a NSW court, but also delivered a $1 billion windfall to two mining executives.

Macdonald has been served, and is due to attend court next month.

He is facing charges of one count of wilful misconduct after granting the Doyles Creek coal exploration licences “without reasonable cause of justification”.

MASSIVE ANCIENT ROMAN GOLD MINE UNCOVERED Aerial mapping in Spain has uncovered an ancient Roman gold mine.

Researchers from the University of Salamanca used aerial mapping and LiDAR to find the mine, which was built more than 2000 years ago, according to Science Daily.

The gold mine complex, dubbed Las Medulas, was built two millennia ago, and features complex hydraulic works, which were used to divert water to the site for processing.

The mine, in Leon, is believed to be the largest opencut gold pit of the entire Roman Empire.

GLENCORE AND PEABODY TO MERGE HUNTER VALLEY COAL MINES Glencore and Peabody Energy have agreed to jointly manage the nearby Wambo and United coal mines in the Hunter Valley, the first joint venture of its kind in the region.

The 50-50 joint venture will combine Wambo’s open cut mining operations with United’s adjacent reserves and is expected to kick off in 2017.

Glencore will manage the combined mining operations and Peabody will AUSTRALIANMINING

continue to operate coal washing and loading facilities.

In a statement released today, Peabody said the JV will deliver significant synergies by improving productivity, cutting costs and extending the life of both mines.

“Peabody continues to take positive steps to further reduce costs, improve our competitive position and create value,” said Peabody Energy president Glenn Kellow.

He said the combined operation will provide ongoing local employment opportunities and economic contribution.

SILVER MINE IN COBAR WANTS TO HIRE LOCALS A company planning to reopen a silver mine in Cobar has called for people in the local area to apply for jobs at the site.

Southern Cross Goldfields bought the Wonawinta Silver project, 80 kilometres south of Cobar, from Cobar Consolidated in September.

The company renamed it to the Manuka project, and is aiming to start mining at the site in December before starting production in January.

Managing director David Sproule said the mine would try to hire locals.

“We’ll be drawing on a radius of about 300 kilometres around the project site,” Sproule said.

“Which includes towns such as Cobar, Nyngan, Narromine, Griffith, Condobolin, Parkes, and so on.

“So we’re looking mainly for people in that area as it’s a drive in drive out arrangement.”

The company has previously said it will initially focus on easily winnable, low cost ounces available for processing including some 350,000 tonnes of stockpiled ore.

It said it had spent $2 million on a plant upgrade at the site, including the installation of a larger ball mill from Kalgoorlie to resolve grinding and recovery issues.

BHP TO CUTS COSTS BY $US2.3BN BHP Billiton is targeting its cash costs and has re-shuffled some the company’s top jobs in order to prepare for the upcoming demerger.

BHP said it will cut $US2.6bn in cash costs as the company targets productivity led gains of at least $US4 billion per year by the end of 2016-17.

The company also revealed capital expenditure would be cut by $US1 billion to $US13 billion in the 2016 financial year with no impact on growth.

Revealing the plans to investors in Sydney today, BHP chief Andrew

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DECEMBER 2014

AUSTRALIAN MINING GETS THE LATEST NEWS EVERY DAY, PROVIDING MINING PROFESSIONALS WITH THE UP TO THE MINUTE INFORMATION ON SAFETY, NEWS AND TECHNOLOGY FOR THE AUSTRALIAN MINING AND RESOURCES INDUSTRY.

Mackenzie described the productivity gains as a “step-change”.

He said it means the company can produce more at lower costs.

In a shake-up of the top jobs, former coal boss Dean Dalla Valle is set to become the marketing, health, safety and environment boss as of January 1 2015.

Current marketing boss Mike Henry will take Dalla Valle’s role as the head of the coal division.

Meanwhile the current aluminium boss Daniel Malchukwill become the copper chief as of March 1 2015.

FMG OFFERS JOBS TO INDIGENOUS PRISONERS Aboriginal prisoners will soon have the opportunity to take on mining employment after their release, thanks to a new agreement between Fortescue Metals Group and WA Department of Corrective Services.

FMG chairman Andrew Forrest has signed a Memorandum of Understanding with Commissioner James McMahon which will enable low-risk prisoners from the Roebourne Prison to undertake training courses while in prison and be guaranteed a job on release.

Over the next year eight prisoners will take part in the Vocational, Training and Employment Centre (VTEC) Fresh Start program, which is the first of its kind under VTEC according to Corrective Services minister Joe Francis.

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THE YEAR IN REVIEW

2014 IN FOCUS A LOOK BACK AT THE UPS, AND MANY DOWNS, OF MINING IN 2014. VICKY VALIDAKIS WRITES

T

here is not much happy news to dwell upon from 2014.

It was not the best year for the mining sector on a number

of fronts.

From safety, to commodity

prices and tough decisions around job cuts; the 12 months that just passed will be remembered for all the wrong reasons.

We take a look back at some of the trends from 2014, and hope 2015 will see a turn-around for those working in the industry.

THE YEAR OF TOO MANY DEATHS

It is often said one death on a mine site is too many but this year 17 people working in the mining industry lost their lives.

This is the highest death rate since 2005-06, even before the

EXPLORATION ACTIVITIES TOOK A MAJOR HIT IN 2014

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days of the mining boom.

It also represented the death of a worker every 15 days in the six month period to June 2014.

Few states or territories in Australia were spared, with deaths recorded at mine sites all across the country except for South Australia and Victoria.

Over eight months in NSW, five workers were killed, and this prompted the New South Wale’s resources and energy minister Anthony Roberts to search for answers.

Roberts said he had written to the Mine Safety Advisory Council to seek “a deeper, holistic examination of current circumstances’’.

“I was concerned that an apparent increase in serious incidents was occurring at the same time as external factors were affecting the industry,” Roberts said.

The announcement came amid a growing rumble in the industry that the downturn in commodity prices had led companies to work machines and people harder, which may be compromising safety.

Contractor workers are overrepresented in the fatality figures and Queensland’s Mines Safety Commissioner sounded a warning earlier this year for the industry to look after its workers.

DECEMBER 2014

Commissioner Stewart Bell said the “tragic loss of life in the mining industry is unacceptable and immediate steps must be taken to stop it”.

He said mine operators, site senior executives, and managers must understand that effective management of contractors is part of their key obligations.

The commissioner has previously stated he was concerned some sites were of the view that the safety of contractors was not management’s problem.

Bell said the “disturbing” increase in mining deaths needs to stop.

THE YEAR OF MASSIVE JOB CUTS

As commodity prices nosedived this year, companies were forced to rebalance their costs and restructure their workforces to pre-boom levels.

Often labelled as productivity drives, jobs were slashed from every commodity in every state.

Australian Mining estimates that more than 2500 jobs were slashed in the coal sector alone as mining companies either downsized their operations or shut them down completely.

The iron ore industry was also hit, with over 500 jobs slashed from BHP Billiton’s iron

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THE YEAR IN REVIEW

kilometres of the 344-kilometre GLNG,” Duke said.

“Santos GLNG delivered railway laid.

She has previously called the first under-sea crossing the project a “crucible of op- for Queensland’s CSG to LNG portunity” during a period of industry.

“We’re particularly proud of global uncertainty.

“It has already shown it will this achievement, given the increate new jobs, and benefit the novation and expertise required greater mining and construc- to achieve a marine crossing like tion related industries, it will this one.”

But in the best news for the add to Australia’s exports, and significantly benefit our West sector, the unpopular mining Australian and national econ- and carbon taxes were both repealed in 2014. omy,” Rinehart said.

The policies were ushered in On the east coast, it was LNG industry that had a stellar year. by the Gillard government in On Curtis Island in Queens- 2012, and both left a bad taste land, three projects worth $70 in the mouth of industry.

THE YEAR OF SOME News that the carbon tax had billion are nearing completion.

MASSIVE MILESTONES BG Group’s QCLNG will been buried was positive news Despite the gloom, it wasn’t all bad news for the industry, and be the first of the projects to for the sector in an otherwise some exciting milestones were reach production, with the first bleak year.

“Repeal of the carbon tax is reached in 2014 which injected shipload of LNG expected in good news for the Queensland much-needed positivity to the December this year.

Meanwhile, the final section economy,” QRC CEO Michael sector.

In Western Australia, Gina of a gas transmission pipeline Roche said.

“The carbon tax was a massive Rinehart’s Roy Hill mine not has been successfully pushed only secured the $7.2 billion debt through a tunnel beneath the double-fail.”

The NSW Minerals Council it needed to go ahead, but also Gladstone harbour to the Santos GLNG plant on Curtis Island. added that the repeal will help to mined first ore.

Santos vice-president down- save resources jobs, congratulating Since May, two million tonnes of high-grade ore has been stream GLNG Rod Duke said the Government on the decision.

There was also a collective stockpiled ready for railing and the pipeline would soon be ready to deliver gas to Curtis island. sigh of relief when Tony Abbott shipment.

Rinehart A M 1 2 said 1 3the _ 0mine 0 0project _ M A T . “This p d f year P ais gabout e 1deliver6 / 1 1came / 1good 3 , on his 9 :election 1 3 : promise 3 5 AM is ahead of schedule, with 200 ing milestones across Santos and buried the mining tax. AM ore operations in the Pilbara.

Jobs in gold, nickel, silver, uranium and alumina were also cut, and unfortunately some analysts say the cull is far from over.

With commodity prices across the board to remain subdued next year (see our outlook on page 12-25), costs will continue to be a key focus for miners.

And because other areas of the industry’s cost structure are less flexible, wages and employment is expected to come under pressure again in the New Year.

AEDT

THE AXING OF THE MINING TAX WAS A WIN FOR COAL

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METALS OUTLOOK 2015

THE 2015 METALS OUTLOOK AFTER A SPATE OF HORROR CYCLES FOR THE MINING INDUSTRY, HOW WILL COMMODITIES FARE NEXT YEAR? COLE LATIMER & VICKY VALIDAKIS REPORT

T

he mining industry has experienced a dire 12 months.

There have been mass layoffs, write downs, and projects being stalled or delayed, whilst exploration has basically come to a standstill.

From the Global Financial Crisis, which seemed to act as the ignition point for this apparently unstoppable boom, commodity prices continually tracked an upwards trajectory, and would do so for a number of years.

For all of the major metals, such as iron ore and gold, there have been huge falls recorded off the back of historically high prices.

Prior to 2014 new ceilings were broken in both these metals, which combined with a skyrocketing coal prices since 2008, essentially created the mining boom bubble, buoying up Australia’s economy as it rode on the back of unbridled growth in China.

These good times – commodity price-wise – occurred as the industry was in its massive development stage, moving their deposits from exploration projects and through feasibility into a

construction stage which was an investment and new capital equipment heavy period.

It was a golden age for the industry: one that came to a screeching halt in 2012.

Prices fell, quickly and surely.

Whilst iron ore held out and rescinded slowly, gold tumbled from its high point of almost US$1800 per troy ounce to just short of US$1100 per oz.

Coal, on the other hand, fell off a financial cliff, as thermal coal began its spike in August 2010 from US$ 96.19 to US$ 141.94 in the space of six months after which it just began a constant downwards movement.

Coking coal has also suffered, with ANZ’s head of Australian economics – corporate and commercial, Justin Fabo, stating that the sector “looks oversold” with the market awash with oversupply pushing prices to multi-years lows.

In terms of all coal mining “major producers are showing no sign of supply discipline and demand growth is either waning of under pressure from alternative supply,” Fabo said.

This was echoed by the Bureau of Resources and Energy Economics, which said global

commodity supply had grown significantly over recent years, placing pressure on prices in the medium term.

It said producers will need to continue to focus on managing costs and improving their competitiveness in order to survive downturn in price cycles.

“We believe the situation is unlikely to improve in the near to medium term,” Fabo added.

However despite it all there is still optimism for the next financial year.

According to IBISWorld, while the end of 2014 and the start of 2015 will see an overall decline of 1.1 per cent in Australian mining revenues to approximately $232 billion, the 2015/16 financial year is pegged to quickly ratchet up, growing 7.1 per cent, with expectations for this upwards trend to continue into the following financial year with 2016/17 predicted to record an 8.4 per cent increase in revenues as recovery continues.

Fabo added that commodity markets have already entered the second half of 2014 on a mildly positive note, “but it’s likely to be a far more gradual recovery than in the past as it will be tempered by lower liquidity

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and stronger US dollar as the US Federal Reserve edges closer to raising interest rates”.

“At the same time, the lack of sustainable uplift in commodity prices on the back of increasing geopolitical risks around the world suggest the market is dismissive of their impact on commodity markets.

“But this view looks a bit too complacent and overall we see the risks skewed modestly to the upside for commodity prices in general.”

IBISWorld’s reports into the next few years have outlined how “growing output is forecast to support division growth in the next five years, which is forecast at a compound annual rate of 4.2 per cent, to reach $285.4 billion in 2019/20”.

BREE expects Australian economic growth to moderate to 2.5 per cent in 2014/15, from 3.1 per cent last financial year.

It said mining was the key contributor to Australia’s economic growth in 2013-14.

“Capital expenditure, particularly in resources and energy projects, has been a key contributor to Australia’s economic growth over the past several years. As these projects are completed and

DECEMBER 2014

Australia transitions to a period of higher commodity production, exports of resources and energy commodities and sustained high levels of residential construction activity will be the key drivers of GDP growth over the medium term.”

Overall, there is a positive trend expected.

In the following pages we break down how the commodities have tracked, and how analysts are laying out their future movement, metal by metal.

Because as Grant Thornton stated in its recent JUMEX report “not all commodity markets are the same, despite the uncertain global backdrop”.

“So; while the overarching global factors are certainly very important for each commodity market, each market often has its own bespoke factors that can influence actual and expected prices.

“A key lesson from recent years, however, has been that some of these factors can be anticipated but some cannot: Factoring in the potential for unexpected development is vital,” Grant Thornton said.

Read on to find out what lies ahead for our metals market. AM

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2014-09-23T08:44:18+10:00

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2014-11-24T10:02:12+11:00

METALS OUTLOOK 2015

IRON ORE: THE 2015 OUTLOOK COLE LATIMER OUTLINES THE STATE OF IRON ORE, AND ITS PROGNOSIS FOR NEXT YEAR

W

hile the mining boom was tied to the skyrocketing gold price and the massive demand in coal, what really created it was iron ore: the explosion in the metal’s price is what really drove the mining boom to its spectacular highs, lifting Australia out of the Global Financial Crisis that hit much of the rest of the world.

By 2011 the Australian market was capitalising on prices of US$187 per tonne, a rate that was 13 times higher than the price then the price only eight years beforehand, in 2003.

Prior to the start of the mining boom this metal was unloved, albeit stable, price-wise.

However in 2004 the metal started an upward trend that continued slowly until 2008, just before the GFC hit, appearing to flatline at US$60 per tonne for the better part of a year. Then the financial turmoil hit and the price begin to spike rapidly, moving upwards unabated until it peaked at close to US$200 per tonne.

In the wake of this commodity rush it dragged the major miners Rio Tinto and BHP upwards, and in turn created a more suitable market for players such as Fortescue Metals to peg high debt against high returns and make their relatively new company viable.

It also created market conditions for the rise of billionaires such as Gina Rinehart with her Roy Hill project and Clive Palmer

AUSTRALIAN IRON ORE OUTPUT WILL INCREASE

with his continually embattled Sino Iron project.

The good times were expected to last forever; at least that is what the Australian Government thought in its attempt to impose both the Resources Super Profits Tax and its successor the Mineral Resources Rent Tax solely on iron ore and coal.

But as 2011 came to an end iron ore began its fall, one that is continuing and seeing the metal plumb the depths of the market.

In the space of only two months it dropped from more than US$177 per tonne down to US$135 per tonne, recovered, and then began to fall once more.

It managed to stay above the US$100 per tonne mark for most of this decline, apart from a very brief dip below this level in September 2012.

Although this decline appears to be unstoppable, the fall must eventually come to a basement: but when?

According to the market, it won’t in 2015.

Last month the price of iron ore fell to approximately US$70 per tonne.

The commodity has been on a consistent downward trend this year, after it plummeted to double digit territory in May from its historic triple digit highs, the first time it has fallen that low in two years.

According to ANZ’s head of Australian economics – corporate and commercial, Justin Fabo, iron ore has been one of the weakest commodities this year, and likely to continue in this vein.

“Key consumers – Chinese

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steel mills – still don’t seem convinced higher prices are warranted, while high iron ore port stocks and rising seaborne supply remains on offer.

It reached a new nadir last month after trading at just US$75 per tonne, marking a 42 per cent loss since the start of the year, although it quickly recovered.

However this new low is not expected to be the bottom of the trough with data from Morningstar predicting an eventual slide below US$70 per tonne.

New research from the analyst firm has forecast the metal to reach its lowest point in 2017, falling to US$70 per tonne before recovering to a more stable US$75 per tonne by 2020, due to Chinese iron ore miners slowing output and the righting of prices as more stock floods the market.

This has been echoed in recent IBISWorld research, which states: “The industry is expected to grow at a slower rate over the next five years through to 2019-20”, adding that “iron ore prices (in US dollars) are expected to decline slightly over the five years through 2019-20 [with] this decline expected to stem partly from higher production and output from Australian mines over the next five years.”

The paper also pointed to an increase in output from Brazil and West Africa flooding the market as contributors to the price slump.

Speaking to Grant Thornton partner – audit & assurance, Brock Mackenzie, he told Australian Mining that current conditions

DECEMBER 2014

IRON ORE INFRASTRUCTURE DEVELOPMENT WILL GROW

had created a perfect storm for the metal early next year, as there are high levels of supply expected to come online from larger producers combined with a slowing growth in China.

This slide for the iron ore sector has not been a surprise for the industry or the market, with the Bureau of Resources and Energy Economics stating in its September report that prices will continue to be strained.

“A rapid increase in iron ore supply combined with moderating growth in China’s steel production have pushed iron ore prices lower in 2014. Prices have fallen nearly 40 per cent down from around US$130 a tonne (CFR China) in January to US$82 a tonne in September,” BREE said.

This later fell to US$70 per tonne in November.

While the group said iron ore price volatility is not uncommon, the difference this time is the oversupply flooding the market.

This is likely to be worsened due to the fact China has now opened its ports to Valemax size carriers, built by Brazilian iron ore giant Vale.

Valemax are Very Large Ore Carriers (VLOC) owned by Brazilian mining giant Vale, and are designed to carry iron ore from Brazil to around the world.

They have capacities ranging from 380 000 to 400 000 short tons deadweight, and are the largest bulk carriers ever built, with draughts of between 22 and

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METALS OUTLOOK 2015

32 metres, and are designed to meet Brazil’s need to freight more in a single journey due to its distance from many of the main iron ore customers.

China initially banned the carriers over concerns regarding the potential impact on supply and prices the large cargoes could have, using the ships own deep draught and size as impetus to revoke vessels of this size from docking at mainland Chinese ports in 2012.

Ship owners previously lobbied against Vale’s super vessels, fearing they would give the company a monopoly over the iron ore and shipping industries.

China Cosco has signed a 25 year deal with Vale that involves 14 of the massive Valemax ships.

“The current regulation actually already legitimises these vessels to berth at Chinese ports. If you look at how the ban was initiated in the first place, it will be unlikely for the government to make an official announcement with much fanfare that says the ban is loosened,” an unnamed executive from state-owned port company explained.

“Eventually, the ban will be lifted in a quiet manner. You may see a Valemax ship granted approval by a local maritime authority to dock, and that will be it. Officials realised the ban has hurt China’s economic interests, pushing up the costs for iron ore imports,” the executive said.

According to Anglo American, this global glut of iron ore, will keep prices at these five year lows for a minimum 12 months.

However Australian iron ore, due to its high quality, will likely still be in demand.

In Australia alone over 200 million tonnes of new ore has begun export at the same time

as China stopped stocking up on the commodity.

Unfortunately for Australian suppliers this is set to increase as BHP and Rio Tinto expand their West Australian iron ore operations, Fortescue cranks up the production rate from its newly opened Solomon Hub, and Roy Hill begins full production.

Mackenzie explained there are “a lot of issues likely to be ahead on the supply side, with it more than likely that larger producers will also use the situation to gain more market share and edge out the smaller producers, so we are likely to see these larger producers use this aggressive pricing environment as an opportunity to push more marginal operations out, so that smaller producers fall by the wayside”.

ANZ’s Fabo clarified the forecast, saying “swelling Australian iron ore exports have weighed on prices but the increase in supply will be slower in the second half”.

Vale expanded on these statements, with the miner’s global director of ferrous marketing and sales, Claudio Alves, telling Bloomberg “I don’t think the market will be oversupplied forever”.

However he went on to echo Mackenzie’s statements on which miners will come through this current trough, stating: “Only the big suppliers with worldclass assets, scale of production, efficiency, and good costs will be able to survive.”

BNP Paribas’ managing director energy and natural resources investment banking Asia-Pacific, David McCombe explained that this will soon reach a tipping point depending on when the Chinese Government chooses

to stop subsiding its iron ore industry.

“There will be fewer players in the market and more opportunities to export to China when the government makes a decision regarding its ongoing support for its own iron ore industry.

“It is supporting it in the same way that it is propping up its own coal industry, and right now many of their mines’ costs are around US$120 per tonne, so they are very marginal at the best of times, so the price will return slightly when these smaller players drop out.”

Credit market conditions in China also affected end-user demand for steel, BREE stated, causing a sluggish growth rate.

Fabo added “the negative market reaction has been overdone, and we think prices are now vulnerable to relief rally if Chinese news starts to improve”.

According to IBISWorld there

TIGHTER MARGINS WILL PRICE OUT SMALLER MINES

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are expectations of improvement, with “further growth forecast over the next five years”.

However Citigroup painted a much darker picture of the 2015 iron ores market.

According to Citigroup analyst reports, the material is likely to average around US$72 per tonne in the first three months of next year.

It went on to paint a darker picture for iron ore, slashing the second quarter forecast from US$80 down to US$65 per tonne; it also downgraded the third quarter from US$78 to US$60.

However it did see a small uplift in the last quarter of 2015, only downgrading the forecast from US$78 to US$62.

Goldman Sachs was slightly more optimistic, holding the view that it will hover around an average price of US$80 per tonne.

BNP Paribas’ managing director energy and natural resources investment banking Asia-Pacific, David McCombe, told Australian Mining the group expects the iron ore price to rebound in 2015, with similar expectations to Goldman Sachs.

“We expect it to rebound to around the low US$80 per tonne mark,” he said.

“It is really all about the performance of the steel sector, which we believe will pick up in the last quarter of 2015.

“While it won’t be a significant rise, longer term we will see the steel sector pick up about two per cent, and increase around two to three per cent the year after that,” McCombe said.

DECEMBER 2014

LARGE SCALE MINES WILL BECOME INDUSTRY NORM

“It will most likely end up sitting, at the end of the year, at between US$85 and US$87 per tonne.

“So we do expect it pick up slightly over the year, but really it will be more about the ability of these iron ore producers to absorb the current losses, and about these miners having positive cash flows moving ahead.”

While BREE also expects iron ore prices to rebound from current lows, it said highs of $US 130 are unlikely to be repeated any time soon.

In regards to investors in the market, Mackenzie said the approach will be similar to that of gold, urging investors to form a view as to the company’s cost of production as a benchmark for whether it will be able to survive further prices.

“The focus for investors should be to familiarise themselves with the production cycle as well,” he added.

This cycle will be demonstrably slower, with less change, in the coming years.

Whilst revenues grew at a rate of 25.2 per cent for the 2013/14 period, it basically came to a standstill this year, with a growth rate of only 1.9 per cent, slowing again next year to 0.7 per cent.

However revenues are predicted to pick up to a more respectable growth rate of 2.1 per cent in 2016/17, moving upwards at a similar rate of 2.9 per cent the following 2017/18 financial year. AM

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METALS OUTLOOK 2015

GOLD: THE 2015 OUTLOOK HOW GOLD REACHED NEW HEIGHTS BEFORE FALLING BACK TO EARTH, AND ITS ROUGH ROAD AHEAD. COLE LATIMER WRITES

G

old has peaked, but the current price schizophrenia of spikes and troughs that have been experienced over the last six months will soon be at an end.

However there is still likely to be pain for a number of unproductive gold miners as the commodity price goes through a rationalisation phase operations with high costs per ounce are likely to fall as the market becomes tighter.

But how did we get to this point, and how did the great decade long Bull Run get to its current state, and where will it head in 2015?

The rise and fall of the gold market did not happen overnight; and it is not the first time this market has moved this frenetically either.

The first time gold made massive leaps was in the late 1970s, due to the end of the Bretton Woods accords – which had codified the strength of the

US dollar in the global financial markets – and the US moving off the gold standard, which removed international mechanisms tying the US dollar to gold via fixed exchange rates.

This drove the US dollar down as it become a fiat currency and fell in its free market exchange price versus gold.

In the wake of this decision prices gradually skyrocketed from US$35 per ounce in 1969 prior to the US currency float, to close to US$500 per ounce in 1980, but a period of rationalisation saw the price fall and then stabilise.

Gold was driven to its most recent historic highs following the Global Financial Crisis, after investors flocked to the metal as a safe bet in the wake of the extreme volatility in the financial markets and ongoing uncertainty over economic growth prospects.

From its average rate of US$ 1200 in 2009/10, a point which it currently languishes below, gold soared over the US and European debt crisis, but as these

markets’ economic conditions have improved the price of the metal has swiftly decreased.

Gold, as a commodity, is often inflated due to fear or uncertainty in the market, with investors flocking to it and pushing up the price in the face of weak economic outlooks.

ANZ’s head of Australian economics – corporate and commercial Justin Fabo explained, “geopolitical tensions have taken

GOLD PRODUCTION IS SLATED TO PEAK NEXT YEAR

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centre-stage for the precious metals markets.”

The crisis in the Ukraine is a key example of this factor affecting the gold price, and is believed to have carried the inflated gold price, allowing it to stay higher than it should have in the face of economic improvement in the US and Europe.

It turned gold back into a safe haven metal, however it has not attributed to another spike in price nor will it in the future, as the price will be dampened by a bullion banking sector that may face default if the commodity rapidly heads north once more.

BNP Paribas’s head of energy and natural resources investment banking Asia-Pacific, David McCombe, told Australian Mining “gold was a haven for certain banks, but the nexus just is not there at the moment”.

Resources industry finance site Mineweb’s journalist Lawrence Williams explained the situation best.

“If some of the analysts on the bullish side of the gold equation are correct in their assumptions that many Western central banks (with the approval of their governments whether they are deemed independent or not) have leased out much of their gold reserves, and that the banks to which they have leased them are in no position to return the bullion, then the proverbial could well be set to

DECEMBER 2014

PHYSICAL DEMAND FOR GOLD IS DOWN IN ASIA

hit the fan as banks default in their commitments.”

If investors call on their banks to repay their physical gold then the market may find a run on banks.

Ignoring this however, most of the global demand for physical gold comes from China and India.

While Indian demand continues to fluctuate on the back of its wedding season expectations on Chinese demand are grimmer.

“Chinese demand for physical gold remains largely on the sidelines and we see further weakness in coming months,” ANZ’s head of Australian economics – corporate and commercial, Justin Fabo said.

“What was a key supportive factor for the gold market in 2013 is proving to be a benign one currently.

“China’s weak gold import volumes, down 14 per cent year on year in the first half of 2014, confirm the softening demand.

“An onshore stock build in China of over 100 tonnes in Q1 2014 is also having a dampening effect on fresh imports,” he added.

Fabo went on to state that “in India, the lull in the festival/ wedding season until November will also see physical premiums subdued”.

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METALS OUTLOOK 2015

McCombe added: “Demand for gold in Asia is down.”

CURRENT PRICE

Gold is continuing its downwards slide, dropping to a new four year low of US$1160 per ounce at the time of writing.

This new drop is the latest blow for the metal, which has seen a consistent slide from its high point of almost US$1800 per troy ounce to its new low point.

Overall gold prices fell close to five per cent last in early November.

McCombe said he expects the price to continue to fall in the short term to south of the US$1100 mark.

According to IBISWorld research the price of gold will rise again, however, stabilising above current rates and “is expected to increase in 2014/15 to an average of US$1411 per troy ounce as the global economy improves and inflationary pressures ease with higher interest rates in the United States and Europe”.

However this is having a flow on effect for the aforementioned gold producers, who will see their profit slashed in the wake of this price righting combined with the increased cost of actual production.

“Overall industry profit is estimated to have decreased from 12.6 per cent of industry revenue in 2009/10 to 8.7 per cent in 2014/15,” IBISWorld stated.

It went on to forecast these rates to decline even further over the next five years “with higher costs contributing to profit declining to a forecast 7.6 per cent of revenue in 2019/20”.

The head of precious metals at the Bank of Nova Scotia told Reuters the market is vulnerable, adding that it is unlikely to increase soon, and will continue on a similar trajectory throughout the year.

The $US1170 mark seems set to stay.

Unfortunately for many miners these current prices sit below their production costs.

CEO of brokerage firm Maison Placements Canada, John Ing, told Bloomberg that this situation is creating a new two tier market, with top tier companies operating good assets with lower costs, while others are saddled with low grade, high costs assets that began during the boom times for gold.

This is creating a new crisis point for the industry, as according

to Fidelity Select Gold, up to a third of worldwide output will be pushed into a cash-flow negative position now gold has fallen below the US$1250 mark.

Speaking to Grant Thornton’s Brock Mackenzie a new cost per ounce matrix is being developed, with the likelihood that if prices fall below US$1100 per ounce Standards & Poor will begin looking at credit ratings.

“The reality was that many companies were chasing production without focusing on their costs as prices were still too high to support this action, but while the price of gold increased gold stocks themselves underperformed massively,” he said.

“At this US$1100 per ounce mark a lot of mines will become very marginal operations, so they are likely to close and supply will diminish and we will see likely see an upwards movement in price again, although it does depend on the US dollar.”

Lower price have already hit some miners, such as Barrick Gold which earlier this year recorded a net profit drop of 90 per cent, after its Q1 2014 net earnings fell to only US$88 million from the previous corresponding period’s earnings of US$847 million.

However the need for miners to re-examine their costs and push them below $1000 has long been on the table.

Earlier this year gold producers gathered at the 2014 Paydirt Australian Gold Conference to discuss the future of the industry in a worsening market.

Northern Star Resources managing director Bill Beament said at the event that although the company has a good record for maximising productivity and efficiency, the overall sector needs to address the expectation for improved cost performance in the upcoming market climate.

“We are aiming to achieve an all-in sustainable cost of $1050 per ounce on average across our four mines and this now includes reviewing all supply contracts and leveraging off the company’s buying power so that we reduce the total site cost per ounce,” Beament said.

Miners sitting at lower costs per ounce like this have a better chance of weathering what will definitely be a stormy market ahead.

Most that fit criteria will probably reduce output to solve the supply issue.

Added to this is the fact “2015 will be the peak in world gold production,” Mackenzie said, “so every year after that there will be less gold produced, which will have a positive effect on the price.”

McCombe went on to state that “this run-off in gold production is expected to sustain the price in the forecast period”.

These immediate significant contributions next year will be made by the Tropicana mine ramping up, Newcrest’s Cadia East mine moving to full production, and Mungana Goldmines Chillagoe and Tanami Gold’s Central Tanami project moving ahead.

A SHINING FUTURE?

In terms of Australian producers, much of their future depends on the vagaries of the movement of the Australian dollar against the US greenback.

According to Beyond the

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MINERS WITH THIN MARGINS WILL FOLD

Boom, a Lowy Institute Paper developed by John Edwards, a board member of the Reserve Bank of Australia and former senior economic advisor for prime minister Paul Keating, “a declining dollar would help.”

The drop will help strengthen Australian gold miners and to a degree inure them against the downturn.

“Just as the appreciation of the Australian dollar to some extent moderated the rise in US dollar commodity prices on the way up, so too a sustained decline in the Australian dollar would moderate the fall in commodity prices on the way down,” Edwards said.

Fabo added: “Gold may find near term support, though the state of physical demand suggests

DECEMBER 2014

prices are likely to retrace lower over the medium term.”

However, much of this depends on the movements of the US Federal Reserve.

“Over the next five years industry revenue and profit will reflect trends in production, US dollar gold prices, and the exchange rate,” IBISWorld explained.

“The US dollar gold price is expected to rise slightly over the next five years and that gain, combined with a marginally weaker Australian dollar will push up gold prices slightly in local currency,” it said.

“Once inflation is taken into account the forecast price increase will be relatively small.”

Mackenzie delved deeper into how the future of gold prices will be affected in the short term by variations in US economic policy.

“There are indications in the new year that the US will increase interest rates, and the appeal of the US dollar increases: the gold price typically moves in opposition to the US dollar,” he said.

“That is why we’ll expect some shifting, so with quantitative easing ceasing the US is likely to increase its interest rates, so the US dollar will have more appeal.”

However Mackenzie stated the gold price has already taken into account this forecast quantitative easing, adding “it is partly behind what is driving the price down now”.

IBISWorld has forecast next year to be the first for revenue growth in the gold sector since 2011/12, with the 2015/16 period seeing a 1.8 per cent increase, after the 2.4 per cent decline expected for the 2014/15 period.

Following that the sector is predicted to grow at a rate of 2.3 per cent the following year, and then 3.5 per cent for the 2017/19 financial year, before once more entering a period of decline as an era of consolidation takes hold and more mergers and acquisitions are seen in the market.

However, despite it all the story next year will be brighter for gold on the back of these IBISWorld growth forecasts, as the rationalisation takes hold and smaller less cost efficient gold miners are priced out of the market due to unproductive operations and higher costs per ounce, leaving only the more labour efficient businesses. AM

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METALS OUTLOOK 2015

NICKEL: THE 2015 OUTLOOK IS THE ROLLERCOASTER COMMODITY NICKEL ABOUT TO GAIN SOME STABILITY? COLE LATIMER REPORTS

T

he story of nickel is finally one of stability.

Since 2005 the metal has been wracked by skyrocketing highs and sharp declines that have caused massive job losses and uncertainty that has seen an exodus from the sector by many of the larger players.

Much of this was due to a fall in stainless steel demand, working inversely to the growing demand for construction steel.

IBISWorld put it succinctly: “Nickel prices, having reached unprecedented highs prior to the global financial crisis, plummeted as global economic growth slumped in subsequent years.”

And while the future is slated to be better, a swift and strong recovery is not forecast.

Earlier this year the metal reached a two year high in May, but since that time has reversed its gains, falling 27 per cent.

Much of this spike was based on Indonesia’s implementation of a ban on unrefined nickel being exported, with prices surging 56 per cent at the time, however the fall came quickly due to the likelihood of current global supply more than meeting the hole left by the Indonesian bam.

BHP’s attempts to sell off its Nickel West assets exemplified the confused nature of the sector.

While the miner saw the assets as valuable enough to retain during

its greater demerger earlier this year, it did not see them as vital enough to keep within its mix.

Instead the miner attempted to sell off the various mines and smelter assets in Western Australia, and while there were plenty of alleged approaches for the suite from other majors such as Glencore and X2 Resources, BHP could not find a buyer and has now been left with the assets.

However the future is now looking more stable for nickel.

As opposed to the volatile movements seen earlier this century, there will finally be some stability ahead.

And much of this is due to the decline in the Australian dollar.

According to IBISWorld “trends in US dollar nickel prices, the value of the Australian dollar and in the volume of nickel production will continue to drive industry performance during the five years through 2018/19”.

Speaking to David McCombe, BNP Paribas managing director energy and natural resources investment banking Asia-Pacific, he told Australian Mining there is likely to be a net deficit in the metal moving out which will drive the price up.

“In 2015 we expect the price to sit around the mid US$18 000 mark, and then it will slowly move up to approximately US$19 000 by 2019,” he said.

Perth based Alto Capital ex-

pects the price to hit approximately US$20 000 per tonne next year.

The price expectation is more than 11 per cent higher than the average US$18 000 evident in the sector so far in calendar 2014 – with Perth-based Alto Capital research analyst, Carey Smith, saying returns could go even higher due to pressure from the greenback.

“By next year, I expect that the Australian dollar will be trading around the range of 85-87c to the US dollar on average and that will be a bonus for Australian nickel producers,” Smith said.

“That exchange market environment can potentially add another 20 per cent in Aussie dollar terms to revenue for producers, so the outlook for nickel not only looks pretty rosy at the moment but continues to hold firm for the long-term,” he said.

There also positive trends

AFTER 2015 NICKEL IS SET TO IMPROVE

AUSTRALIANMINING

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predicted ahead, with IBISWorld stating “new firms are expected to enter the industry seeking new nickel resources”.

However “a dose of realism is also needed and while there is always pressure to unearth the next big discovery, our junior explorers have time on their side – particularly if they are venturing into Western Australia’s Fraser Range,” Smith said.

“While Sirius Resources ignited that region when it struck nickel sulphide mineralisation at Nova just over two years ago, Fraser Range is still a very fresh nickel province and we should not expect the Sirius success to be replicated in any sort of hurry.

“Two years in a whole new province isn’t a long time to get to understand its geology and my sense is that nickel explorers already in or planning to enter the province have a two-year window or so in order to make the level of discoveries that can keep market sentiment interested in both nickel, and the Fraser Range.”

Smith noted that some Australian explorers are seeking opportunities away from Australia but nickel-minded players did not need to look much further than Western Australia.

Australian Nickel Conference Convenor, Bill Repard, said the nickel sector had been energised this year, partly by speculation about how rapidly China was depleting its 2013 ore stockpile of 25 million tonnes, and similar speculation on when and if the Philippines would follow Indonesia’s path and impose

DECEMBER 2014

SITES SUCH AS RAVENSTHORPE HAVE BORNE THE BRUNT OF NICKEL’S DECLINE

export bans on unprocessed nickel ore.

“Currently, there are no new large-scale nickel projects coming on stream and existing or mooted export bans will only add to the pace at which supply and demand pressures must invariably spike a price rise,” Repard said.

But a strong recovery is not on the cards.

“Nickel prices are forecast to bottom out in 2014/15 and remain low through 2018/19,” IBISWorld said.

Western Areas CFO Joe Belladonna pointed to next year as the pinch point for the metal, in particular quality nickel sulphides, which will force the industry to focus on new technological innovations if it is to remain viable.

In the previous 2013/14 period nickel revenues saw a decline of 6.9 per cent, which was an im provement on the previous period’s recorded 19.7 per cent decline.

The shrinking of the sector is predicted to slow again in the 2014/15 period to only 3.9 per cent before it records its first positive movement since 2010/11, registering a 2.1 per cent improvement in 2015/16.

This upwards trend will continue for the next few years, with a 3.3 per cent increase in 2016/17, a 4.7 per cent increase in 2017/18, and a larger 6.3 per cent increase in revenues in 2018/19. AM

AM0914_000_KEN

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2014-08-12T09:59:09+10:00

Wear Problems Exist.

We Solve Them.

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METALS OUTLOOK 2015

COPPER: THE 2015 OUTLOOK CAN COPPER EXPAND, OR HAS IT ALREADY PEAKED? COLE LATIMER WRITES

C

opper mining is a dying industry, having passed the point of maturity it is now in decline.

While there is extremely moderate growth predicted in the next five years, the world price of copper is forecast to steadily decline.

The future is not bright for this crucial metal, even as demand slowly increases.

According to a BHP Billiton presentation and recent United Nations data, demand for the metal will increase as many third and second world nations develop, creating long term drivers with increased consumption as they build their infrastructure.

This in part is due to the massive shift society is seeing, precipitating a decline in rural populations to greater urbanisation and in turn economic development.

With the global population currently standing at more than

7.1 billion it is almost evenly split 50/50, however “the urban population is expected to grow globally from 3.6 billion (as of 2010) to 4.3 billion (in 2020) and to 5 billion in 2030,” the UN data stated, eventually accounting for 60 per cent of the world’s total population.

Unicef reports that by 2050 around 70 per cent of the world will live in cities.

Australia will also be one of the most urban nations in the world, with 94 per cent of people living in cities or metropolitan areas.

China and India alone will have cities with more than a billion people living in them.

In the meantime the rural population is predicted to remain flat at around 3.5 billion for the next three decades.

As part of this massive shift towards urban centres commodity demand is forecast to grow in line.

These people will need to build, power, and run their cities, and copper will be the metal

that will allow them to do so.

According to BHP “Chinese copper intensity doubles from rural (less than 500 000 people) to smallest urban centres; and more than triples from rural to large urban centres”.

It is proven that demand evolves with economic development, although “copper [does] plateau

COPPER DEMAND WILL PLATEAU IN CHINA

AUSTRALIANMINING

20

later in the industrialisation cycle” both “China and India are still in the early stages of development”.

In explicit terms, the total demand for semi-fabricated products is expected to grow at three per cent compound annual growth rate (CAGR) over the coming decade, with the primary drivers China and India sitting at five and ten per cent CAGR respectively.

While average industry copper grade percentages remained fairly consist in process feed from 1980 to 1998, they have been on a sharp downward slope that looks to get only worse.

High grades, high quantity mines such as Escondida, Grasberg, Bingham, Olympic Dam, Prominent Hill, Northpakes, Cadia or Ernest Henry are unlikely to be on the cards again.

“Due to these declining grades the average run of mine (ROM) grades for copper have actually fallen by three quarters to less than one per cent, yet at the same time annual supply increased from under one million tonnes to more than 16 million tonnes,” BHP CEO Andrew Mackenzie said.

According to a Wood Mackenzie report from 2012 “copper grades have declined at an average rate of 2.8 per cent per annum over the last decade”.

It went on to state that at current production rates the quality will continue to decline due to the

DECEMBER 2014

NEW MAJOR FINDS LIKE PROMINENT HILL ARE UNLIKELY IN THE FUTURE

depletion of existing resources and these lower grade ores.

As Wood Mackenzie points out: “New discoveries have not been able to reverse the long term trend [of decline]”.

This, coupled with BHP’s Andrew Mackenzie’s comments on grades, projects a bleak future.

And while there is likely to be a short term spike as long awaited projects come online, in the longer term the forecast resource depletion means that a new, and currently unknown supply is needed.

The only likely saviour, in terms of Australian producers, is a weak Australian dollar, which will push up revenues despite prices remaining fairly flat.

According to IBISWorld research “industry revenue is forecast to grow at an annualised rate of 1.5 per cent over the next five years to US$7.1 billion in 2019/20”.

“This reflects the combination of higher output levels, a weaker Australian dollar and higher US dollar prices.

“If the Australian dollar depreciates against the US dollar, export demand increases and contracts will earn domestic players more revenue.”

Speaking to BNP Paribas managing director energy and

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METALS OUTLOOK 2015

natural resources – investment banking Asia Pacific, David McCombe, he explained in the short term “copper will be coming off over 2015 through to 2017, but it will be moving up again to the back end of 2017.”

Much of this is due to the “current imbalance because of higher supply, as there is around 23 million tonnes of supply but only about 22 million tonnes of demand”.

“This will not be a massive move down, but this oversupply will hurt for some time.”

ANZ head of economics corporate and commercial, Justin Fabo, added that “copper looks vulnerable enough to slip back through the US$7000 per tonne mark as we approach the normally quiet northern hemisphere summer”.

“Operating rates at copper tube and pipe fabricators fell below 80 per cent mid-year, an indication that end-user demand is weak; we would be positioned for some further downside in Looking beyond this period expect an average of US$291.8 the short-term.”

However IBISWorld added Wood Mackenzie estimates a per pound for 2018 through to “increased output [will] more price of US$300 per pound by 2022. than offset AM 1 0 1lower 4 _ 0Australian 0 0 _ F R O 2020 - and 1 beyond 2 0 1while 4 - 0analysts 9 - 1 5 T 1In3terms : 5 6of: revenue 4 2 + 1 for 0 :the 0 0 polled by Consensus Forecast industry growth rates are set to dollar copper prices”.

AUSTRALIANMINING

21

slow progressively over the next few years before entering into a brief period of decline in 2017/18, before returning to minimal growth in the next period. AM

DECEMBER 2014

MINES SUCH AS OLYMPIC DAM WILL INCREASE OUTPUT TO OFFSET DECLINING PRICES

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METALS OUTLOOK 2015

SILVER, ZINC, LEAD: THE 2015 OUTLOOK THE MARKET FOR BASE METALS IS MIXED IN THE NEAR FUTURE. COLE LATIMER WRITES

T

he market for base metals silver, lead, and zinc is finally seeing moderate action.

The period leading to the global financial crisis saw an explosion of growth, with the sector seeing a 30.9 per cent growth in revenue followed swiftly by a 56.2 per cent growth in revenues, creating a heady market.

However once the GFC hit the bottom swiftly fell out of the market, as prices retreated quickly, and inversely, to the rest of the mining sector.

A 13.2 per cent decline was chased by another period of plummeting revenue, with the sector recording a 43.5 per cent drop in revenue.

It recovered briefly in 2010 before seeing another swift fall into negative territory in 2012 before the current lift into even pricing territory.

This, more than many realise, had a major effect on the Australian mining landscape as

the nation is the largest lead exporter and one of the largest zinc concentrate exporters worldwide.

So what lies ahead for the metals?

Much of it relies on the continued weakness of the Australian dollar.

IBISWorld research states that overall revenues and the price of the metals are “forecast to increase over the five years through 2018/19 due to the interplay of higher output, stronger US dollar prices for silver, lead, and zinc, and a weaker Australia dollar”.

According to Grant Thornton’s Brock Mackenzie, “silver is currently sitting at a four year low, not too dissimilar to gold.”

“As it is used predominately in industrial applications more than some other metals it is closely tied to the economic conditions in Japan and Europe, so movement there is more likely to impact its trajectory.”

BNP Paribas’ David McCombe added that he expects base metals

to rise slightly over the 2015 period, however when it comes to silver “it will be coming off slightly due to supply and demand issues, but it will see a marginal increase in the backend of 2016, and expect another increase in the 2018/19 period”.

IBISWorld expects silver to be volatile in the coming years “given its status as an investment metal and an industrial input; nonetheless, demand for silver is also expected to expand”.

However it added that silver prices are expected to decrease in the short term.

ZINC PROCESSING IN AUSTRALIA WILL SHRINK

AUSTRALIANMINING

22

Zinc does have a slightly brighter future ahead.

ANZ head of economics commercial and corporate, Justin Fabo, explained: “Zinc looks to require further short term caution following recent strength.”

“The Shanghai Futures Exchange/London Metals Exchange arbitrage has closed for Chinese importers, as reflected in refined zinc imports.

“Investor positioning is also building strongly on the long side as it becomes a consensus trade; the medium term, however, still looks positive as weak supply growth pushes the market further into deficit,” he said.

This will be strengthened by a forecast growth in Chinese zinc demand, as well as Indian steel demand, as the nations focus on construction and building projects, which will support a solid rise in the metal over the next five years.

IBISWorld forecasts a rise in the zinc price in the short term.

The story of lead is very much one of increasing demand for batteries and power, with the price expected to increase in the near term.

Overall, Fabo believes “base metals have improved amid slightly more positive economic data in China and noticeably better news on the United States economy”.

However he added: “While the macro environment is showing signs of gradual improvement, it will continue to be supply side issues that drive base metal markets; on that front, we continue

DECEMBER 2014

SILVER HAS A DEPRESSED PRICING FUTURE AHEAD

to favour nickel and zinc in the near term.”

IBISWorld research stated that the small gains ahead in the 2016/17 “will be offset by forecast falls in 2017/18 due to pricing declines”.

The current slide seen in overall refining is also expected to slow, but not stop.

“Demand from downstream silver, lead, and zinc smelting and refining [is] expected to be flat as the manufacturing industry continues to shrink,” IBISWorld states.

According to IBISWorld the volatility experienced by the silver, lead, and zinc sector will subside, with the days of massive revenue spikes followed by huge declines over.

The cycle of revenue spikes seen in 2007, followed by the dramatic fall in the space of two years, is no longer the norm for the base metals, with a period of calm expected ahead with moderate growth predicted.

The 2014/15 period is forecast to generate a healthy 2.8 per cent growth in revenues levels, followed by a 3 per cent growth in the following period, and another period of growth – 4.2 per cent – in 2016/17.

However these gains are expected to retreat in the 2017/18 period by 4.1 per cent, before recording another phase of growth of just below 4 per cent in the 2018/19 period. AM

FD_FP

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AM1214_024

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2014-11-25T14:27:48+11:00

ENERGY OUTLOOK 2015

COAL: THE 2015 OUTLOOK COAL HAS ENDURED A HORROR 2014, SO WHAT DO PUNDITS EXPECT FOR THE COMING YEAR? VICKY VALIDAKIS WRITES

C

oal has had a tum ultuous 12 months but will 2015 be any better?

Coal prices declined steadily in the first months of 2014 in response to a combination of increased supply and lower import demand from China.

Australian benchmark contract prices for high-quality metallurgical coal settled at $US120 in the September quarter, a price that left many coal operations unprofitable.

Thermal coal fared even worse, with Newcastle free on board spot prices averaging US$73 a tonne in the first eight months of 2014, down 16 per cent year on year.

The price glut mean something had to give, and 2014 was the year the coal industry decided to restructure its workforce leading to massive job cuts.

Australian Mining estimates that more than 2500 jobs in the coal sector were cut as mining companies either downsized their operations or shut them down completely.

The Integra coal complex in

the Hunter Valley was an early victim of coal’s fall from grace, as Vale announced in May that it would close the operation, taking 500 with it.

Isaac Plains in Central Queensland also went into care and maintenance, with 300 jobs cut.

And in news that came as a shock to many, Glencore decided to close its coal operations for three weeks over Christmas.

The company said the move was a “considered management decision given the current oversupply situation”.

Glencore said this will reduce the need to push incremental sales in the weak commodity price environment.

And herein lies the problem with the coal price and its chance of recovering much-needed ground in 2015.

The Bureau of Resources and Energy Economics (BREE) said Australia exported 181 million tonnes in 2013-14 of metallurgical coal in 2013-14, with this expected to increase to 185 million tonnes in 2014-15.

While thermal coal exports are tipped to top 196 million tonnes in 2014-15.

However it’s the values that are important. Metallurgical coal is expected to remain steady at around $23.2 billion.

Thermal coal’s value is expected to decline by 9 per cent to $15.1 billion.

This is because there is an oversupply of both products on the world market, and countries like China are not willing to pay close to previous highs of $180 a tonne.

“Globally, production overtook demand in 2012-13, resulting in a strong drop-off in the world prices for steaming and coking

EXPORTS WILL INCREASE DESPITE LOWER PRICES

AUSTRALIANMINING

24

coal,” IBISWorld explained.

Making matters worse for miners in Australia is the supply coming online from other competitors such as Indonesia, Colombia and South Africa.

At the same time, rising natural gas production in the United States means thermal coal will be diverted from domestic American markets, where it is used as an energy source, to export destinations.

This will all work to keep a lid on prices, especially if China can get a handle on its production capacity and costs.

IBISWorld said this means the focus on cost structures will continue, with wages and employment to come under pressure as the capital-intensive industry seeks additional productivity gains.

It said employment is expected to decline at a compound annual rate of 3.9 per cent over the next five years as other areas of the industry’s cost structure are less flexible.

Companies are also assessing their place in the market, the consultant firm said, with many mine stakes thought to be on the market and assets like Clermont coal mine in Queensland.

However, despite the gloom Australian producers who can restrain their costs are expected to remain competitive in the global market as the local currency continues to weaken against the U.S dollar.

BREE said a rapid price rise in coking coal prices was unlikely,

DECEMBER 2014

THERMAL COAL WILL REMAIN WEAK AHEAD

and forecast the commodity to decline by 2.6 per cent to an average US$123 a tonne in 2015.

But there is an upside.

From 2016, the market balance is expected to tighten as China’s real estate sector begins to recover and a prolonged period of oversupply comes to an end through the closure of high-cost operations. The metallurgical coal contract price is projected to rise modestly to US$130 a tonne (in 2014 dollar terms) by 2019.

However thermal coal is expected to remain weak and decline by 6 per cent to settle at US$77 in 2015.

But exports of steaming coal to key markets in Asia are expected to expand over the next few years as new coal-fired power stations come onstream.

BREE said from 2016 the market balance is expected to tighten as more mines close and availability tightens.

This will result in contract prices rising to US$86 a tonne by 2019.

While the price rises are not dramatic, and are nowhere near the highs seen at the peak of the boom, they will work to ease a little pressure for mining companies.

Especially the ones making hard decisions now on how to remain viable until the upshot comes to fruition. AM

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ENERGY OUTLOOK 2015

OIL AND GAS : THE 2015 OUTLOOK AS THE MINING BOOM WINDS DOWN, THE ENERGY BOOM IS ABOUT TO TAKE HOLD. BEN HAGEMANN WRITES

I

n Australia’s energy market, it is certainly all about the gas in 2015.

Major gas projects around the country are stepping ever closer to completion, and the most notable will be QGC’s liquefaction plant on Curtis Island, QCLNG. Construction contractor Bechtel says the QCLNG plant will be filling up the tanks, and then ships with freshly liquefied gas from the Surat Basin by 20 December 2014, but last minute efforts to spur workers into greater productivity with lotteries and promises of huge cash prizes for doing overtime speak of a desperate attempt to meet the deadline.

Over on the west coast the Gorgon project is plodding away under the looming shadow of protected industrial action.

The greatly delayed project is forecast to cross the finishing line late in 2015, but workers have recently voted down the EBA proposal by more than 80 per cent, and if Chevron don’t concede a roster change from 4/1 to 3/1 there may be further costly delays to the project.

An exciting but controversial new development lies in the advent of FLNG. A massive, floating LNG plant is under construction in South Korea, one which will contain a single LNG liquefaction train and will be capable of processing onshore gas from off the NW shelf.

Unions are concerned the offshore vessel will compromise local jobs, and safety conditions, but a WA parliamentary inquiry is currently thrashing out the issue of whether these vessels will be safe enough under existing Australian offshore petroleum regulations.

The producers say yes, but others are concerned that FLNG is far more complicated than existing oil exploration and production rigs, given that the vessel will contain the cryogenic risks of an entire LNG train, compressed into one sixth of the space it would occupy on land.

Santos, who are not far behind QCLNG with their GLNG plant on Curtis Island, have proposed a new raft of LNG investment in the Surat and Bowen Basins, which will continue the expansion of Queensland’s gas reserves and have infrastructure construction work continuing through 2015.

Ongoing investment in the Queensland gas fields will see a need for 1700 new construction roles with Santos, albeit rolled out over the next 20 years.

The latest insight from BNP Paribas (30 October) says that China is set to become the world’s largest oil consumer by 2027, and the world’s second largest gas consumer by

2025, so in the meantime we can expect a solid export market for newly developed gas.

However, gas production projects around the world are on the increase, and this will result in falling prices, just as it has done for iron ore and coal. Whether this results in a positive effect on the hip pocket of Australian consumers will depend on our domestic distributors, rather than on global trading prices. Australian gas has seen predictions that the domestic price will triple by 2021, making everyone wonder what happened to all the promises of cheaper gas thanks to the bevy of new liquefaction plants.

In September gas explorer and producer AWE released the details of a massive new gas discovery, which could be the biggest discovery since Santos in the 60s.

The new field is called the Waitsia Discovery (formerly Seneco Deep), and is located in the North Perth basin.

Gross contingent resources in the area range from 65 to 1170 billion cubic feet of gas, and will be an exciting new play to watch in WA gas in 2015.

Oil in Australia also saw an excellent new discovery earlier this year off the North West shelf, the Phoenix South-1 project, potentially one of the biggest oil finds in Australian history.

Log and core data from explorer Canarvon Petroleum’s drilling of four confirmed oil columns will be released before the end of 2014, which will indicate the potential of the resource for next year.

On a geopolitical note some alarming reports have come out about threats made by Al Quaida and militant jihadists to cut off the “Achilles Heel of western economies”, which identified choke points to attack and included targeting oil shipping routes to Australia.

With more than 90 per cent of Australia’s oil imported, new oil discoveries such as the Phoenix South-1 project will become more valuable in terms of helping to secure our energy security, regardless of whether there is any weight to the threats.

BP has also announced it will increase exploration in the Great Australian Bight, and next year will commence plans to build a new helicopter landing facility, and possibly and airstrip which will be dedicated to servicing exploration rigs in the Southern Ocean.

The oil giant has awarded a $138 million contract to international helicopter company Bristow Group to set up the new air base at Ceduna, meaning a great construction project will create more jobs in area, which in turn will become a new centre for offshore oil exploration in Australia. AM AUSTRALIANMINING

25

A NEW MASSIVE OIL SOURCE WAS DISCOVERED OFF WA

CSG WILL CONTINUE TO BE CONTROVERSIAL IN 2015

DECEMBER 2014

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FIFO

THE CHANGING FACE OF FIFO THE RISE IN MENTAL HEALTH ISSUES IN FIFO HAVE PROMPTED A GOVERNMENTAL INQUIRY, SO WHAT DOES THIS MEAN FOR THE INDUSTRY? BEN HAGEMANN WRITES

I

n the past few years, questions about the effects of a fly-in, fly-out (FIFO) roster on the health of individual workers have been asked with increasing frequency.

FIFO has certainly come a long way: From its origins in the 60s and 70s when workers were expected to stay out bush, on site for the duration of the project, which could be anywhere from a few weeks to a few months, the time frames have been whittled down to a variety of structured rosters, dependable routines that workers can identify as their “swing”.

Depending on the sector of industry, rosters range between 8/6 days (on/off) to 4/1 weeks.

It has become clear that many people and organisations believe FIFO has a significant impact on the mental health of workers, to the extent that in August the WA state parliament unanimously agreed to have the Education and Health Parliamentary Standing Committee launch an inquiry into mental health impacts of FIFO work arrangements.

Impetus for the inquiry came to a head when the media ran

reports that in Western Australia alone there had been nine suicides among FIFO workers in the past year.

Added to that the family of one victim, 25 year old Rhys Connor, came forward to speak publically about their son and bring the issue into the public spotlight.

The inquiry has seen submissions and formal evidence presented from a range of stakeholders, including industry lobby groups representing employers, unions representing workers, and mental health service providers and researchers.

The preliminary report from the inquiry was released on November 27, however at time of writing Australian Mining talked to Dr. Graham Jacobs, member of the Legislative Assembly for Eyre and chairman of the inquiry.

Although Dr. Jacobs could not go into specifics about the recommendations to be made by the inquiry, he was quite clear that the main issue of concern was that data relating to suicides and FIFO statistics was very difficult to locate and research.

“What has been evident is that this data is not in any way

centrally collated,” Jacobs said.

“I’m a little surprised and disappointed there’s no central database we can refer to.”

Evidence given at the inquiry from a range of organisations, including unions (CFMEU, AMWU), lobbyists (AMMA, AMEC), and government (Department of Mines and Petroleum, Worksafe) showed there was a distinct lack of reporting of workplace suicides.

This resulted in part from a lack of communication between organisations, and the perception of them not needing to record certain types of data.

Evidence given at the inquiry by the DMP and Worksafe

showed that camps were not legally considered workplaces, however it was also shown that companies kept control over camps, particularly in terms of visitor entry (including union delegates).

As such, suicides which took place in FIFO camps were not recorded in terms of the manner or duration of rostered work in which the victim was employed, contributing to a “paucity of data”.

Jacobs told Australian Mining that it was likely the inquiry would recommend establishment of a facility for centralised reporting and collection of data about mental health incidents (including suicides) in the FIFO industries.

“I wouldn’t want to pre-empt it, but I think there is a likelihood, because of the surprise and disappointment we’ve had when trying to just look at some of the basic data in a central database, but that option is not available,” he said.

IN BRIEF

THE STRESSES OF CAMP LIFE HAVE BEEN IDENTIFIED AS A MAJOR FACTOR

AUSTRALIANMINING

26

Although the preliminary report was not released at time of writing, it is obvious there will need to be a cultural change within the reporting systems of companies, unions, and government organisations.

By recording the complete details of an incident in several places, the data could then be collated for appropriate research purposes.

This will require legislative changes, however it would appear

DECEMBER 2014

THIS IS THE FIRST INQUIRY INTO FIFO MENTAL HEALTH

from lobbyist submissions from the AMMA and AMEC that employers would prefer FIFO employment remain unregulated.

What has become clear in this inquiry that there will need to be regulations put in place that govern aspects of FIFO. If employers and their lobbyists join the process of legislative creation and reform in a supportive fashion, rather than to resist change, they will have the opportunity to work in with employee representatives and government.

While it is perfectly understandable that companies would want to resist increased legislative control over the use of FIFO hiring practices, the upcoming changes could also be viewed as an opportunity to develop new gains in productivity.

Political action in the past has shown us that legislative controls have improved the mining industry, especially in terms of safety and controlling the number of fatalities each year.

By refreshing the way we look at FIFO, by improving systems of recording data for statistical and research purposes, and by being prepared to act on the learnings taken from such research, forward thinking companies will realise that improvement of the level of care for individual workers can have a bottom-up effect on the productive capability of entire mining operations. AM

AM1014_000_ESS_r

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2014-09-16T16:20:35+10:00

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AM1214_028

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2014-11-24T15:05:53+11:00

AUTOMATION & REMOTE CONTROL

THE SIX STUMBLING BLOCKS OF AUTOMATION AUTOMATION MAY BE THE FUTURE, BUT ITS IMPLEMENTATION IS NEVER STRAIGHTFORWARD

M

ining automation is on the wish list for most companies extracting ore from

the ground in Australia today.

As the industry seeks efficiencies across the board in an effort to drive down costs and weather the volatile commodity prices, many are turning to automating

processes to ensure best practice, consistently higher productivity levels, and to increase safety on site.

Initiatives such as Rio Tinto’s Mine of the Future program and

AUTOMATION IS STILL IN ITS EARLY PHASES

AUSTRALIANMINING

28

its remote operations centre, as well as its Minerals Processing Centre of Excellence, are leading the way, while BHP has developed its ‘integrated remote operating centre’ and Fortescue trials and implements automated truck fleets on their sites.

And this is just in Australia.

Overseas Vale is working with ABB to make its massive iron ore mine S11D entirely truckless, through the use of in-pit crushing and conveying methods.

And a new technology solution from Bentley and Cyest Technology that was created in conjunction with four of South Africa’s top miners is set to automate the mine planning and scheduling process completely.

But how a company make the shift from manned processes to automated operations isn’t without difficulties.

Bill Gates once said that the first rule of any technology used in business is that “automation applied to an efficient operation will magnify the efficiency.”

“The second is that automation applied to an inefficient operation will magnify the inefficiency.”

When looking at new innovation opportunities, it becomes clear

DECEMBER 2014

the mining sector can’t afford to layer new technology over old operating models, but rather overhauling current systems to ensure automation is really the best way forward.

Dr. Marcin Ziemski, principal consultant from Tech Mahindra agrees and says that while automation in mining can be a wellknown game-changer, a new approach to how it is actualised is required.

“Streamlining a mining value chain where the cost base is in the billions, whilst improving production efficiency and output means doing things differently, not just the same things more efficiently,” Ziemski said.

This was echoed by head of Jurgen Beier, Deloitte’s head of mining for Canada, who said that tweaking existing processes will not deliver the sizable changes required in today’s operating environment.

“To build true competitive advantage, companies must look beyond incremental performance improvement to determine how they can revise their systems to embrace the broad theme of innovation,” Beier said.

CRCMining is an industry-

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2014-11-24T15:08:52+11:00

AUTOMATION & REMOTE CONTROL

and technology providers that driven global organisation that are independently designed, specialised in research and inimplemented, and managed, novation in the mining sector. and that will evolve indepenThe company has teamed up dently over time. “A holistic with miners to create innovaframework for integration is tive breakthrough automotive an essential prerequisite for solutions and understands the the ‘mine of the future’,” process is not always as simple McAree said, adding “this and straightforward as it seems. will not happen unless the CRCMining’s professor Ross industry agrees and invests McAree has put together a list of in a common plan”. six stumbling blocks that mines should consider before choosing 3. Operational technology and information technology must to implement automation. integrate: Automation is a “There is no guarantee that means for optimising business technology will be able to deliver processes. There is a need to to its promise,” McAree stated. have common ways of effici“To achieve the highest valently delivering information ue, there are six key challenges about operational processes to that can only be solved through guide performance improvecollaboration between researchment interventions. “The comers, mining companies, and plexity of this task is not to equipment manufacturers.” be underestimated, nor is the 1. The double burden of imvalue that can be derived from maturity: The implementation achieving it,” he said. of automation technology is “We need sustainable ways challenged by both the lack 4. Sourcing skilled people with of developing people with the appropriate expertise: The of maturity in technology and right skills and career oppordesign, development, and deimplementation. “We need tunities,” he said. ployment of automation techto create ways of raising the nologies for mining draws on 5. Altered responsibilities: New benchmarks,” McAree said. technologies have the potential skills that are providing to 2. The need for a common interto disrupt organisational strucbe a scarce commodity across operability plan: The automatures and shift responsibilities the sector. Mine personnel of tion of mining processes will necessarily using A M 1 1 1 be 4 _realised 0 0 0 _ SPI -the future 1 2will 0 1need 4 - different 1 0 - 2 4 T 1in1subtle : 1 1ways. : 2 6 + 1 1 : 0 0 “Understanding and managskills and technical knowledge. building blocks from OEMs

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29

ing both the ‘seen’ and ‘unseen’ impact of technology is critical to its success,” McAree said.

6. Equivalent levels of safety: New technologies change the risk profile of mine operations.

“We need to ensure these risks are properly understood and addressed, so that automation

DECEMBER 2014

SAFETY NEEDS TO RISE IN CONJUNCTION WITH AUTOMATION INITIATIVES

delivers equivalent or better levels of safety, whilst still adhering to the business case on which it is founded,” professor McAree stated. AM

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SOFTWARE

RIDING THE CYCLE OF MINING EVOLUTION NEW SOFTWARE IS GIVING COMPANIES THE EDGE ON MINE DESIGNING AND SURVEYING. VICKY VALIDAKIS WRITES

A

two-year collaboration with four of South Africa’s top miners has led to the development of an innovative software solution for mine planning and surveying.

Recognising the need to update the mine planning process so that it was automated, continuous and timely, Bentley teamed up with Cyest Technology and approached miners with an aim to work on a collaborative solution.

Anlgo American Platinum, AngloGold Ashanti, Lonmin, and Royal Bafokeng all took part in the syndicated process and had direct input in the design and definition of the software for use in underground tabular mining.

Bentley said the newly developed MineCycle products which came out of this process,

are based on industry proven software foundations to facilitate ‘optioneering’.

Bentley’s vice president of simulation and product management Robert Mankowski describes optioneering as finding the optimal solution to any engineering problem.

“The ability to quickly assess operational planning and engineering alternatives was one of the ‘musts’ that our syndicate development sponsors identified,” Mankowski told Australian Mining.

“It’s about providing software that can help engineers evaluate many different options quickly; so by automating many of the tasks that were done manually, we can save them time and make them more productive in those tasks by giving them the ability to evaluate multiple options.

“This leads to better informed

decisions and picking a better solution.”

Bentley says their new range of MineCycle products will enable mining companies to address some of their pain points, including the need for a continuous rather than intermittent mine planning cycle that is automated, helping miners become more agile.

AUTOMATION ENABLES TIME SAVING DURING LAYOUT

AUSTRALIANMINING

30

MINECYCLE DESIGNER

Bentley’s senior product marketing manager Victor Alvarez said mine planning is currently a long and tedious process, and can take months to generate just one plan.

“Despite being immersed in a business environment that is constantly changing – from commodity prices to labour issues and other unexpected events occurring – operators have been burdened with a planning process that is long and tedious and it impairs their ability to respond,” Alvarez said.

This leads to insufficient time to explore alternatives because of the long design and planning process.

To achieve greater planning agility Bentley saw two things that needed to change.

One was the automation of manual steps with rules-based intelligence that allows each step of the planning process to occur more quickly.

Alvarez said the automation is not just to eliminate manual tedium involved in planning, it also encapsulates industry best standards and practices for each of the steps required to create a mine plan.

The second change was that sequential flow needed to be consolidated into a single environment that provides a consolidated dynamic planning capability where design, resource

DECEMBER 2014

MINERS WORKED WITH BENTLEY TO DESIGN IT

evaluation, and scheduling can occur simultaneously.

With this in mind, MineCycle Designer allows mine planners to configure 3D intelligent mining objects that know how to behave against other objects and the geology of a mine site.

“The stope for example becomes an object that relates to other objects in the mine – when you bring in this new survey and or geology data the design automatically adapts and adjusts to the new information,” Alvarez explained.

This means the plan is live and auto-adjusts based on how the mine is designed, so when things change the mine plan changes with it.

Cyest Technology managing director Gary Lane explained that planners will no longer have to click on every single line to shorten them when the geology moves by one metre as the software automates this process.

The software also creates a rules-based template that governs the scheduling of the mine plan.

“We represent the actual mining sequence logic in a template and then we’re propagating that template across the entire mine – so you’re auto-generating all the scheduling activity,” Lane told Australian Mining.

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SOFTWARE

“You push a button and have a production schedule which in the past would take the guys sometimes weeks and weeks – now we’re talking seconds.”

Crew allocation and tracking are also part of the scheduling software, allowing miners to see what crew they will need, where they need to go, and what work is required to execute the mine plan.

Lane said the software will revolutionise mine planning.

“We’ve had people in the collaboration groups stand up and do a Mexican wave – that’s how profound it has been when they saw what the software can do,” he said told Australian Mining.

MINECYCLE SURVEY

Designed to work separately or in conjunction with MineCycle Designer, MineCycle Survey is a single application that uses the same software and tools to complete all survey and survey data intelligence.

MineCycle Survey can be used in both underground and surface mines and uses information direct from survey equipment to generate 3D models of the mine.

Alvarez said this gives companies the real-time ability to analyse the as-mined and as-planned aspects of their site.

With the ability to survey stockpile volumes, pegs, offsets, progressive open cut surveys and notes, the software can take data from a variety of sensors, instruments, file formats, laser scanners and point clouds and combine the diverse data into one survey without time-consuming conversions.

With faster production of survey intelligence, Bentley said the A M 0 9process, 1 4 _ 0accelerated 0 0 _ QUI planning with MineCycle Designer, can

“It creates more time for leverage more up-to-date survey information and create higher businesses,” Lane said.

“We’re going to give people quality plans.

Another benefit is the ability more time to think through the to create a 3D spatial view of plan and more time to analyse. the ore body, further enhancing It’s revolutionised how you do mine scheduling.” scheduling options.

“Now the mine designer is able to see on the fly how many A COLLABORATIVE ounces of platinum or grams of APPROACH gold is being mined and is able to The new software is being create alternatives as required,” installed at mine sites across South Lane explained.

Africa, with its implementation With all this information in expected in the early stages of one system so crucial to differing next year. workers across the site, Bentley While the proof of its success said it was important to create will depend on the creation of an open architecture where the the first mine plan using the data is accessible the rest of the system, what is apparent is the enterprise. success of the syndicated deLane says the software gives velopment process. miners the ability to generate The program took place a mine plan more quickly, over 100 weeks with testing meaning multiple mine plans and conducted every month to can be produced to test different ensure the software met the strategic alternatives and respond companies’ requirements.

1 in2 any 0 1external 4 - 0 8 - 1 4 T 1Mankowski 0 : 3 1 : said 3 2the + 1program 0 : 0 0 to changes global conditions. de-risked the development process

AUSTRALIANMINING

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THE PROGRAM PROVIDES SCHEDULING SUPPORT

both for Bentley and the miners involved.

“The collaboration provided us with the opportunity to validate that our innovations and solutions were going to meet their needs,” Mankowski told Australian Mining.

“We knew we were taking a very iterative approach to the problem. We met with them frequently, talked to them about their issues, about specifications for the solution, and then as soon as we had software to show we were able to demonstrate that to them and get their feedback through the entire process.

“It really helped us minimise the risk associated with the development and de-risks it for them miners as well.”

Devlin Anderson, section surveyor at Anglo American Platinum, said the software is

DECEMBER 2014

set to “push the boundaries of our current way of doing business in the 21st century”.

“We have collectively given input regarding our various operating requirements in our fields to Bentley and Cyest over the last two years,” Anderson explained.

“This information has driven them to produce a product that not only looks and functions as we intended but has exceeded our expectations.”

Meanwhile, MRM and MES senior manager at Lonmin Ren van Zyl said he is looking forward to a configurable, open, and integrated system that allows users to have one point of contact in terms of software that will give them all the functionality they require to perform their work.

“We eagerly anticipate the successful launch and implementation of these products that are simple to use and fit for business purpose,” van Zyl said.

While the current MineCycle Designer software can only be used in the niche South African underground tabular environment, Bentley and Cyest are looking to find companies to team up with to develop similar software for use in open cut mines.

While no names were given, Bentley said there has been a great deal of interest shown by mining companies for a possible collaboration process starting next year.

“It’s all about increasing production through improved efficiency while reducing cost,” Bentley’s solution executive Dave Body told Australian Mining.

“The mining majors are now looking for innovative technology that can deliver on that promise.” AM Australian Mining was a guest of Bentley at it’s recent Year in Infrastructure conference.

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FINANCE

THE ANU DIVESTMENT SAGA AN ANU DECISION TO DIVEST FROM A NUMBER OF MINERS ON ‘ETHICAL’ GROUNDS HAS SHAKEN MINING. BEN HAGEMANN REPORTS

T

he divestment of interest in seven resource companies by the Australian National University ruffled more than a few industry feathers in late 2014, but why were these companies targeted?

Divestment has become an anti-fossil fuel buzzword. It’s regarded by green activists as one of the key strategies to halt the progress of the coal and petroleum industries, but is its effect any more than symbolic?

What happens when a national institution tries to make a public stand?

The most recent Australian divestment saga took off in the media on October 3, when ANU vice chancellor Ian Young made an announcement that would rock the resources community; that the university would divest its

stock interests in seven mining and resource companies.

“We should not invest in companies that cause social harm,” Young said at the time, adding that the companies in question were “not socially responsible and doing harm”.

To anyone who knew about those companies, it was an utterly bizarre statement, and one which threw the media into confusion.

The achievement of persuading the ANU to divest from companies that profit from fossil fuel was regarded as a great success by the student collective Fossil Free ANU (FFANU), however of the companies divested only two fell into that category: Santos and Oil Search.

The other five companies were mineral sands miner Iluka Resources, gold miner Sandfire Resources, nickel explorer Sirius Resources, nickel and gold

miner Independence Group, and Australia’s largest gold producer Newcrest Mining.

In July ANU enlisted the aid of CAER (Centre for Australian Ethical Research), an investment consultancy which assists in determining the ESG (Environmental, Social, Governance) rating of stockmarket-listed companies so that investors can be assured their decisions are ‘responsible’, such as avoiding investment in companies which assist or are involved in the production of tobacco, military hardware, or other socially ‘irresponsible’ businesses.

CAER is part of a global research network co-ordinated by the UK-based organisation EIRIS, which provides responsible investment advice and has been in business for 30 years.

Australian Mining spoke with CAER chief executive Duncan

AUSTRALIANMINING

32

Paterson, to ask about the methodology that led to the selection and divestment of the aggrieved companies.

“We didn’t use particular criteria for that decision,” Paterson said.

“We don’t generally comment on the specific criteria that apply to different companies, it’s unfair to the companies involved.”

However, Paterson did clarify that ANU simply subscribes to the general research service provided by CAER. “One of the key pieces of misinformation out there about the ANU decision is that the research was in some way tailored or commissioned to assess those companies, that’s not the way we do things,” Paterson said.

“There are a number of different criteria: we look at something like 150 different criteria areas for companies, investors will

DECEMBER 2014

come to us and ask us questions about a range of different sorts of things they’re interested in, and sometimes investors will buy an off-the-shelf rating system.

“Ian Young is on the record talking about how the ANU purchased our off the shelf ESG rating system.”

Patterson was careful to point out that CAER itself is impartial to the ESG needs of investors, and does not “blacklist” companies, as was described by Australian Financial Review.

“We are in no way an activist organisation seeking to attack companies,” he said.

“We are a non-partisan and independent organisation – we do not publish blacklists, we do not advocate for divestment.”

Paterson stressed that CAER has been providing ESG research services to investment clients in Australia for over a decade,

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FINANCE

with a range of clients investing in different sectors.

“All of our clients have different sorts of motivations, ranging from ethical investors who might want to avoid gaming and tobacco, through to mainstream ESG integration investors who are seeking to efficiently incorporate ESG factors into their portfolio management,” he said.

Iluka Resources general manager (for investor and external relations) Dr. Rob Porter said representatives of the company met with CAER to discuss their process of evaluation.

“They have a lot of different criteria,” Porter said.

“If you’re involved in mining activities you don’t rate very well to start off with because it’s an associated with that. extractive activity.”

“We are, in a very preliminary Porter said CAER had a number way, involved in overseas jurisof criteria that would be difficult dictions, but we’re not seen to for most small mining companies have an adequate enunciation to meet. of policies around human rights “They have criteria like: ‘Do abuses and child labour.” you have a dedicated manager The ANU divestment, if not who is responsible for water about fossil fuel, was supposed to management?’ or ‘Do you have be a decision made on the basis a dedicated senior manager for of sustainability and responsible CO2 or emissions’,” Porter said. business practices, but a closer “We are not a large company look at some of the companies

by A any no,O M revealed M matter 0 9 1 4of_means, 0 0 0 so _ D 1 a strong 2 0 1pattern 4 - 0of8posi- 2 1 we don’t have dedicated people tive contributions to community,

Your Free

YOUNG CALLED THE MINERS ‘SOCIALLY IRRESPONSIBLE’

good environmental management, and sustainable practices.

ENVIRONMENT, SOCIETY, GOVERNANCE

Iluka Resources announced earlier in October that it was confident in its sustainability credentials, that it operated within the framework of ASX corporate governance principles, and that it had a commitment to the highest standards of health, safety and environmental performance.

T 1 6 : 5 6 : 5 8 + 1 0 : 0 0 The company also has a

documented track record of responsible rehabilitation of areas disturbed by exploration and mining operations.

In May this year Iluka Resources won the South Australian Premier’s Award for Environmental Excellence, for research partnerships to promote industry best practice at the Jacinth-Ambrosia mineral sands operation.

Iluka was also recognised in September for outstanding contributions on the part of Narngulu operations manager Stuart Forrester, for promoting the role of women in mining, and in 2013 won the Excellence in Social Inclusion award for indigenous employment, education and business development in South Australia.

Sirius Resources managing director Mark Bennett is closely affiliated with Indigenous Services Australia director Tony Shaw, who has praised the nickel explorer for carrying out best practice engagement with the Nagadju people in negotiating for land usage for the Nova Nickel Project, near the Fraser Range in WA. Bennett has been scheduled to join Shaw, a member of the Stolen Generation, on a cultural diversity speaking tour with workshop events to help other companies learn how to engage with traditional landholders with respect and sensitivity.

Oil Search, an exploration company with 85 years of history in Papua New Guinea, has strong involvement in community health programs, and is also a signatory Continued page 34

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AM1214_034

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FINANCE

From page 33 to the UN Global Compact.

Oil Search told Australian Mining: “While we respect the right of any investor to sell its shares, this divestment was supposedly based on the assertion that Oil Search is ‘socially irresponsible’. In our opinion, the research to support this conclusion was conducted without rigour, transparency in methodology, or consistency in application across the sector.”

“ANU did not bother to confirm or consult with Oil Search before making the decision to divest. If it had, it would have seen that Oil Search operates globally recognised social and community programmes in PNG and is one of the leaders is the field of public health, being a principal recipient of funding from the UN’s Global Fund to deliver health programmes in PNG. “Companies are held to high standards of governance and disclosure. So should the organisations which publicly criticise them.”

Sandfire Resources has an independently certified environmental management system which includes development of environmental standards and pro-active management aimed at minimising the company’s footprint.

Santos has a lengthy history of community involvement and contributions, and was the largest company of those divested.

However, Santos was the only company to receive a written apology from ANU chancellor (and former foreign minister) Gareth Evans, who said the gas energy produced by Santos was “contributing to the social good”.

A WIN FOR THE STUDENTS? By campaigning on ANU campus, FFANU managed to garner support from 82 per cent of students, with substantial support from staff as well.

FFANU spokesperson Tom Swann, a student studying for a Masters of Climate Change Policies and Economics, said there was a level of disappointment in the companies chosen for divestment by ANU. “I think it’s interesting to see the sort of accusation that we somehow co-opted the university administration,” he said.

“We had to fight an incredibly difficult fight to get them to pay attention to us, and in the end they haven’t really done what we asked for either.”

According to the ANU Environment Collective, top fossil fuel

SANTOS RECEIVED AN APOLOGY FROM ANU

producers currently in the ANU investment portfolio include BHP Billiton, Rio Tinto, Wesfarmers, and Woodside Petroleum, as well as fossil fuel industry service providers Mermaid Marine and WorleyParsons.

WHAT WAS ACHIEVED?

In the wake of the decision, ANU chancellor Gareth Evans sent a letter of apology to Santos chief David Knox, one which expressed deep regret in “any

embarrassment suffered by Santos over the decision to divest interests in the gas producer”.

Evans wrote that although Santos was a contributor to social harm caused by CO2 emissions, ANU accepted that “the energy produced by Santos powers needed utilities and industries – contributing to the social good”.

“The council will, of course, review its decision if it is persuaded that there are flaws in the methodology used by ANU’s consultants, CAER, to rank companies or if there are inaccuracies in the information relied on by CAER,” Evans wrote.

“Neither I nor the vice-chancellor nor any other ANU council member to my knowledge has described Santos specifically as a ‘socially irresponsible’ company.

“We are aware of the many positive contributions that your company, and some others from which we are divesting, have made to Australian society.”

This confusing retraction (which did not, by the way, lead to reinvestment) threw into doubt any claim FFANU could lay on having influenced the decision to divest.

It was very clear that the decision had nothing to do with fossil fuel divestment.

That was the only impression one could take from ANU vicechancellor Ian Young, who said in a Fairfax op-ed ‘Time to move to a post-carbon world’ that the “extraordinary” response to the decision to divest was because it was interpreted as “another domino in the divestmentmovement effect, involving individuals and institutions deciding to sell their holdings in fossil fuel-producing companies”.

ECONOMIC SLIDE

FFANU FELT THE DIVESTMENT DID NOT GO FAR ENOUGH

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DECEMBER 2014

It is worth noting that the period leading up to the ANU announcement saw a massive plunge on the ASX 300, during which none of the divested companies were able to escape unharmed.

Each of the seven companies took a hit during September, reaching troughs shortly after the ANU announcement.

Losses on share prices for each company between September 1 and October 3 ranged from 50 cents for Independence Group, up to $1.40 for Santos.

ANU has not commented on whether this contributed to their decision.

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FINANCE

LEGAL ACTION

Iluka’s Rob Porter said the company did not intend to pursue the matter through legal channels.

“Like other companies we’re not particularly impressed with the quality of the rigour of the research, nor the fact that there was no real dialogue with the company in terms of being crosschecked, or having it reviewed independently,” Porter explained.

“But rather than get into a brawl about this matter we’ll engage with them and do what we can to change the assessment.”

However, Sandfire Resources CEO Karl Simich took affront to the divestment of his company

by ANU, but more so at the profiling conducted by CAER, and recently followed through with his threat to take legal action over the issue.

“CAER has not ascertained the facts, resulting in a mislead“Following the extraordinary ing profile on Sandfire which power industry,” Sandfire said.

“Sandfire has one copper- level of media attention a number would in turn appear to have led to ANU’s unfortunate public gold operating asset 120km of companies have now committed comments and actions,” Simich from Meekatharra in Western to provide CAER with further Australia and neither it or any information. This is a welcome said.

These legal proceedings al- of its joint venture partners are development,” EIRIS said.

“However reports that CAER leging “misleading or deceptive exploring for uranium.”

An announcement made by will ‘re-write’ their research sericonduct” were launched against CAER, but not the ANU, on Nov- Sandfire to the ASX in November ously misrepresent the situation.”

The press release from CAER said they had sought the retraction ember 13.

On October 10 Sandfire de- of two press releases dated 19 on October 20 said they would scribed the profile about them and 20 October, from CAER and not rewrite the research provided which was supplied by CAER its UK-based research partner, to the ANU. “The media releases relate to to ANU, and said: “The profile EIRIS. The release from EIRIS on corporate profiles prepared by criticises the Company in relation to a host of stakeholder manage- October 19 said research into the CAER which purported to analyse companies was based on publically the environmental, social and ment issues.”

“In one of its more startling available information, and that governance practices of certain and inaccurate criticisms, the the research provided to ANU companies including Sandfire,” profile states that Sandfire remained “a fair assessment… the miner said. operates A M 1 in 1 a1major 4 _ 0nuclear 0 0 _ area S M A of -how 1things 2 0stood 1 4 before - 0 9 -the 3 0 T 1Sandfire 5 : 1 said 9 : they 0 8 were + 1 unsuc0 : 0 0 cessful in persuading CAER and and is involved in the nuclear controversy”.

SANDFIRE WAS MISTAKENLY CALLED A URANIUM MINER

EIRIS to issue a formal retraction, however CAER said they had removed the press releases from their website soon after the request was made.

Sandfire has contended that CAER did not conduct their research in accordance with EIRIS research processes, which refers to engaging in “focused dialogue” with companies on the basis of targeted questionnaires.

CAER said that each of the seven companies had their information updated in the past 12 months, however Sandfire said they had not received a targeted questionnaire in that period, and

were not given opportunity to address any of the issues raised in their CAER profile.

“CAER has not ascertained the facts, resulting in a misleading profile on Sandfire which would in turn appear to have led to ANU’s unfortunate public comments and actions.”

Australian Mining understands that the action filed by Sandfire against CAER seeks a formal retraction of the statements issued

by CAER in October, as well as amendments to their company profile, plus costs.

If successful, Sandfire’s case will certainly cause further stir in the investment profiling industry and review of research practices, but regardless of the outcome mining companies will be more conscious of the need for up to date reporting, and maintaining ongoing dialogue with companies such as CAER that keep company profiles on record for investor reference.

In the end, it would seem that more trouble than good has been caused by ANU’s decision; not in that they decided to divest from these companies, but that they did so publically, with a statement written in potentially libellous, broad strokes about the companies’ participation in irresponsible “social harm”, without any further justification for their assessment than to point at CAER and then wash their hands of the whole affair.

Although whether this very convoluted affair will be the start of a divestment domino effect, as referred to by vicechancellor Young, will remain to be seen. AM

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2014-11-24T13:47:09+11:00

HYDRAULICS & PNEUMATICS

SIMULTANEOUS SAFETY NEW HYDRAULIC TENSIONING SYSTEMS ARE CUTTING FATIGUE, AND INCREASING SAFETY

T

he process of bolt and stud tensioning for pipefitters is laborious and time consuming, and requires specialised experience to ensure the job is done right.

The efforts of an inexperienced worker who attempts to evenly tension flange studs will invariably result in bolt load scatter, and the need to start over.

However, hydraulic nut systems can eliminate the need for that special touch. By simultaneously tensioning all bolts or studs with a hydraulic nut system, even tensioning is assured.

Although there are a number of bolt tensioning systems available, many of them require that bolts or studs are a number of inches longer than would be ordinarily necessary.

In order to set up for routine maintenance with hydraulic nuts, a new set of longer bolts need to be supplied, which also presents additional expense.

Brisbane engineering manufacturer Technofast has gone a long way to solving these problems. Technofast has devised a hydraulic nut system which not only speeds up the process of bolt

tensioning by removing human error variables, but avoids the need to replace longer bolts, and can withstand extreme temperature environments.

Technofast general manager Rob Bucknell said many hydraulic tensioning systems on the market can be slow to use, with time taken to fully engage the thread of the stud or bolt.

“Ours has a quick release mechanism on the nut, so oneand-a-half turns will have full engagement onto the nut,” he said.

“The other companies have tensioning systems that are different from ours – with theirs the stud needs to be longer to allow the system to grab it.”

With the Technofast CamNut system, the bolts don’t need to be longer as the tensioner will grab into the CamNut instead of the bolt or stud.

With the investment of a set of EziTite hydraulic nuts on any major plant fitting, maintenance times can be slashed, reducing the kind of downtime that damages productivity.

Maintenance planners at the Northparkes copper gold mine have invested in using Technofast

EziTite hydraulic nuts on their E48 crushing station.

Under ordinary circumstances the set-up was standard nuts which would be done up with a flogging spanner, taking three or four workers up to four hours to complete the task of removing and retightening bolts on the crusher feed chute.

Aside from OHS issues like using flogging spanners and physical fatigue, the maintenance task was also frustrated by incorrect or uneven bolt loading, which would result in bolts vibrating loose during operation.

Using EziTite hydraulic nuts with polywashers, task planning has been able to remove the risks of manual handling and worker

SIMULTANEOUS TIGHTENING CUTS THE INSTALL TIME

AUSTRALIANMINING

36

fatigue by making the process of removal and replacement much easier, and by tightening all the bolts simultaneously by virtue of hydraulic connection in sequence the nuts no longer vibrate loose during operation.

Overall the maintenance time and manpower for this task has been reduced from a possible four hours for several workers, to only two hours for two workers to perform the same task.

One of the most significant advantages of the Technofast systems is their ability to withstand extreme temperatures.

The EziTite hydraulic nuts are made from a specially developed, high temperature alloy steel which is unique to the Technofast range.

EziTite TR hydraulic nuts and CamNut systems are used on steam turbines and other extreme temperature applications, speeding up maintenance not only by saving on time taken by maintenance staff to perform necessary work, but by doing away with the need for bolt heating in the tensioning process.

The CamNut hydraulic nuts are able to operate in conditions ranging from -40 degrees Celsius up to 650 degrees, and the EziTite TR Hydraulic nuts operate up to 550 degrees and higher in some instances.

Effectiveness of the CamNut is best demonstrated in these extreme temperature environments, especially in relation to the closure of power generation turbines and steam turbine casings, such as those used in mining, energy and minerals processing industries.

DECEMBER 2014

THE PROBLEM OF UNEVEN LOADING HAS BEEN SOLVED

Instead of using the time consuming traditional process of heating and shrinking bolts for tensioning, simultaneous hydraulic tensioning dramatically shortens the time required.

Release and retensioning of the fastening devices can be carried out quickly and easily, especially so given that in the case of a breakdown, removal of the CamNuts can be carried out before the turbine or housing has fully cooled down from operating temperatures.

The Taeanb Power Stantion in South Korea has invested in the use of special M110x4.0 high temperature ExiTite TR hydraulic nuts for their boiler feed pumps.

The traditional methods for maintenance of this system took eight hours and three or four personnel to complete the job of tensioning bolts until the correct elongation was reached.

This system had a number of problems, including the use of a large torque wrench weighing approximately 125 kilograms, which caused damage to studs, hex nuts and pump surfaces, as well as supplying irregular torque readings which were difficult to relate to tension.

The new system using EziTite nuts has reduced the maintenance time to an astonishing 30 minutes, and ensured that precise bolt loading was achieved through simultaneous tensioning, which made the client decide to upgrade the fastening system on a further seven boiler feed pumps. AM

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PRODUCT SHOWCASE

CAT’S LARGEST WHEEL LOADER Cat has developed its largest ever wheel loader – the 994K. The new machine has a greater payload capacity than its predecessor, the 994H, cutting down the number of passes required to load large haul trucks.

The standard 994K can carry 40.8 tonnes per pass, with the high lift version able to move 38.1 tonnes per pass, approximately 18 and 20 per cent more, respectively, than the previous models.

“The 994K loads mining trucks in the 250, 200 and 150 short ton classes in one less pass than the previous model. The high lift configuration is a sixpass match with the popular Cat 793 mining truck, and the high lift as well as the standard configuration loads the Cat 789 in five passes,” Caterpillar said.

The machine has also been upgraded in terms of engine power, hydraulics, breakout force, and rimpull, as well as lateral stability.

Cat’s 994K has also been designed with Australian operations in mind, with a new high ambient package allowing the loader to operate in temperatures as high as 50 degrees Celsius.

kinematics,” Cat said.

“The new bucket design has an extended floor, larger radius and angled side bars for fast loading, high fill factors and good material retention.”

It has a bucket capacity ranging

from 19.1 to 24.5 cubic metres for the standard and high lift.

“A number of efficiency improvements, such as the electronically controlled and hydraulically driven cooling system fan, also help keep operating costs down.”

It is powered by a Cat 3516E engine, which produces 1297kW of power, and works through a Cat planetary powershift transmission designed specifically for mining applications.

“An integral Impeller Clutch Torque Converter and Rimpull Control System allow the operator to precisely adjust power at the wheels to specific loading conditions by modulating rimpull from 100 to 25 percent, reducing potential for tyre slippage without diminishing hydraulic capacity,” Cat added.

Safety has also been a focus of the new machine, with it featuring a reduced stair angle for easy access and egress, increased visibility for operators, optimised LED lighting, and improved cameras for greater site awareness, and reduced sound in the cab to help fight operator fatigue.

For service operators the wheel loader has been designed so engine oil change intervals are 500 hours minimum, with all routine service points are conveniently located on the left side of the loader, while hydraulically driven auto lube handles linkage greasing.

It will be commercially available in the first quarter of 2016.

• Caterpillar www.au.cat.com

HYDRAULIC SHOVELS

Caterpillar operator trainer, said.

“The three-seat cab design allowed me to train two operators at the same time, making operator training more efficient; and the elevated trainer’s seat provides an unobstructed view of the digging area, which is crucial when training operators on new equipment.”

The hydraulic mining shovel features a modular construction, with a walk through power module that enables easy access to components and increased serviceability.

This modular design also aids shipping and field assembly of the machine.

A single engine configuration also simplifies maintenance.

The 6020B is powered by a 778kW Cat C32 ACERT engine.

Pump-flow allocation technology drives hydraulic pump utilisation to reduce operating energy losses and increase fuel savings, while pumps also move hydraulic oil through a cooling circuit to maintain optimum oil temperature in the harsh Australian mining environment.

It also features an automatic lubricant system to reduce service times and ensure durability.

Cat’s 6020B is configured as a backhoe and handles a standard bucket size of 12 cubic metres.

It has both a coal bucket and a MultiPlus rock bucket for use in dense rock and aggressive digging conditions.

The buckets feature hammerless teeth, which have been designed specifically for the 6020B, and have simple 180 degree turns to lock and unlock each tooth for faster and safer removal.

Caterpillar has designed the hydraulic shovel to use four of the Cat MineStar System’s capability sets – Detect, with more cameras and sensing technology; Terrain, for loading guidance; Fleet, for tracking and production reporting; and Health, for machine condition reporting.

Pre-production versions of the 6020B have been field tested at the Rosebel gold mine in Suriname.

• Caterpillar www.au.cat.com

THE MACHINE CAN CARRY MORE THAN 40 TONNES PER PASS

An optional fuel tank now holds enough fuel for 24 hours straight operation without refuelling.

In regards to its bucket “new high performance buckets in a wide range of capacities are optimized for the 994K linkage

THE FIRST THREE SEAT DESIGN IN ITS CLASS

Caterpillar has released its new 22 tonne 6020B hydraulic shovel for mining.

The shovel features a 22 tonne payload, and weighs in at 224 tonnes itself.

The 6020B features a new cab and operator station with increased visibility provided by a large floor window and expansive windshield and side windows, Caterpillar said.

“Unrestricted lines of sight to the crawler trucks and pit floor aid the operator when repositioning the shovel and when loading trucks,” it said.

The cab also includes two additional seats for a trainer and observer, making this three seat cab design the first in this size class of shovels.

“All the mining company operators working with our three test machines – in three different countries – adapted to the 6020B very quickly, regardless of their previous experience on other equipment,” Steve Maloney, a AUSTRALIANMINING

38

DECEMBER 2014

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PRODUCT SHOWCASE

SPRAY ON ROOF MESH Joint funding has been announced for a project to develop a polymer-based alternative to steel mesh sheet reinforcements in underground mines.

One million dollars in funding from chemical company BASF and the Australian Coal Association Research Program has been allocated to prototype the sprayable, fast-acting solution at the University of Wollongong.

Development of the steel mesh substitute, which replaces the need to manually lift and install mesh in underground coalmines, has previously been supported since 2007 by ACARP. “Because the product can be spray-applied, ToughSkin is expected to generate significant improvements in safety, development productivity and effectiveness in the roadway development support cycle,” Matthew Ross, Global Head of Underground Construction Chemicals, BASF SE, said in a statement.

According to a March 2009 THE REINFORCEMENT CAN BE APPLIED IN SECONDS, CAN BE BOLTED THROUGH, AND IS FIRE RESISTANT presentation of the technology, theAspray-applied or 1irritation M 1 2 1 4 _reinforcement 0 0 0 _ A M P through, 1 is fire 2 0resistant 1 4 - and 1 1 anti- 1 3 T 4 : 5 2during : 4 7application. + 1 1 : 0 0 but the product would be inter- • BASF sets in seconds and can be bolted static, and creates no toxic emissions It will be trialled in Australia, nationally relevant if developed. www.basf.com.au

connecting you to versatile and COMPLIANT POWER solutions Ampcontrol’s new versatile, compact substation designed specifically for metalliferous mining.

Our 11kV/1050V substation meets the requirements of metalliferous mining regulations, AS/NZS4871, AS/NZS3007 and with AS/NZS2081 compliant relays it delivers a safe, reliable and compliant solution. The design includes customisable transformer, enclosure and layout configurations to optimise operation, maintenance and risk mitigation needs.

Visit ampcontrolgroup.com/metalliferoussubstation to find out more about our solution

AUSTRALIANMINING

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DECEMBER 2014

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PRODUCT SHOWCASE

SAFER LOW LOADERS Atlas Copco has released its under ground low profile loaders with fully enclosed cabins. The machine – Scooptram ST7LP low profile loader – was previously only supplied with a canopy, but has now been upgraded.

This latest development is an increase in safety for operators, providing full ROPS and FOPS protection.

According to Atlas Copco it is the only supplier to provide a cabin in the seven tonne low profile sector.

The Scooptram ST7LP itself is a low profile 6.8 tonne capacity loader for narrow vein mining.

It is 1.4 metres high and 8.5 metres long and designed for back heights as low as 1.6 metres. It has a short power frame and a long wheel base which makes it easy to maneuver.

This is the latest addition to a series of upgrades on its Scooptram series.

Earlier this year Atlas Copco announced a new side dump bucket as an option for its loaders.

According to Atlas Copco, the side dump bucket option allows the loader to be used in a wider range of applications from tunnel projects to rail and road tunnels, as well as rapid tunnel development in mining.

• Atlas Copco www.atlascopco.com.au

THE OPERATOR CABIN OF THE LOADER IS NOW FULLY ENCLOSED

CONCRETE SPRAYERS Atlas Copco has launched the first of its MEYCO branded mobile concrete sprayers.

Dubbed the MEYCO Versa, as in ‘versatile’, the mobile shotcreting unit is an all in one unit designed to be used by a single operator in mid-sized tunnels.

Its carrier platform is built with a 4X4 crab steering capability, and is powered

by Tier 4 diesel engines, for cleaner operation underground.

The Versa also has a new boom, an optional 75kW onboard compressor, a 20 cubic metre per hour low pulsation concrete pump, and a high precision dosing system.

According to Atlas Copco MEYCO product manager Christof Zielgler, “one of the key features of this machine is its Mezza boom which is fast and smooth, while at the same time reducing overall wear and tear. This has been achieved thanks to a new type of glide bearing technology that we have developed as a result of feedback from our customers.”

The machine also features an easy to use operator interface, and also has the ability to be remotely operate.

• Atlas Copco www.atlascopco.com.au

FEATURES A MEZZA BOOM

AUSTRALIANMINING

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DECEMBER 2014

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PRODUCT SHOWCASE

UPGRADED MINE TRUCKS Atlas Copco has upgraded its MT42 mine truck with a newly designed box.

The manufacturer f irst re leased its initial truck in 2009, and has now redesigned it with a new tailgate and engine alternative.

The new box is made with high strength steel, and has the same physical envelope size as the previous model but with a reduced dump height.

“The geometry is new with optimised internal plate angles, making it easier for material to be released,” Atlas Copco said.

The new tailgate also acts as a spill guard that automatically THE NEW BOX HAS A REDUCED DUMP HEIGHT folds down before dumping without affecting ground clearance or visibility for the rear exhaust emissions requirements fully integrated into the design of both EPA Tier 4 final and of the Minetruck MT42 and view camera. the Atlas Copco’s Rig Control “The gate is hydraulically EU stage IV levels.

“Compared to Tier 3 emission System, RCS. operated and the status of the As an example, the status of gate’s position is presented for levels the new engine represents the operator on the display in a 90 percent reduction for both the particulate filter and the level PM (particulate matter) and of the diesel exhaust fluid tank the cabin.”

Its engine has also be re- NOx (nitrogen oxides),” Atlas can be monitored on the display imagined, A M 1 0with 1 4a _new 0 0Cummins 0 _ S T Y Copco L E -says.1 2 0 1 4 - 0 9 - 2in 3the T 0cabin.”

9 : 3 8 : 1 6 + 1 0 : The new MT42 also has an “The engine installation is QSX15 alternative, that meets the

AUSTRALIANMINING

41

optional electromagnetic retarder braking system.

“When hauling downhill, the retarder creates resistance and retardation, providing wear-free braking.

“Under the right conditions it can also allow for a higher resulting in increased 0speed, 0 productivity.

DECEMBER 2014

“This solution can be especially useful in applications with a high degree of haulage downhill with load, such as haulage of waste rock fill or in cut and fill applications.”

The new truck will hit the market from 2015.

• Atlas Copco www.atlascopco.com.au

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PRODUCT SHOWCASE

DRILL CORE ANALYSIS Particle and Surface Sciences have developed a new method to easily analyse drill cores.

Its gas displacement pycnometer is a low-cost, non-destructive, non-hazardous technique for measuring the skeletal volume.

However, this technique involves a very tedious process because the maximum volume sample chamber capacity of existing models requires the geological scientist to break a core into many smaller pieces that are then analysed and an average of the multiple analyses used to arrive at a reliable value for the skeletal volume.

Micromeritics’ Custom Engineered Products group has recently designed a gas displacement pycnometer to address the specific need of a customer who seeks to measure the pore volume of drilling cores without having to break off small pieces that fit into a standard sample chamber.

Micromeritics custom engineered the

popular AccuPyc II 1340 with a large sample chamber measuring approximately 2000cm³ in volume to accommodate a 95mm diameter core of up to 278mm in length, improving sampling statistics by eliminating the need to run multiple analyses. The sample chamber can be customised to accept essentially any one of the various core sizes used throughout the world for reservoir evaluation.

The Micromeritics Corepyc, available from Particle & Surface Sciences is a custom instrument for drill core analysis designed to test drill cores intact without breaking them.

Suitable for analysis work in mineral research, deep drilling exploration, promising underground reserves, precious minerals in ore, oil and gas, rock parts and mineral exploration, the custom drill core analyser allows testing of unusually shaped large items.

• Particle & Surface Sciences 02 4323 7822 info@pss.aus.net www.pss.aus.net

SIMPLIFIES COMPLEX WEIGHING TRANSACTIONS

VEHICLE WEIGHING SCALES Mettler Toledo introduces the latest member of its DataBridge family of professional weighing software.

Designed for large and growing businesses, the new DataBridge MS scale management system connects to multiple vehicle scales, simplifying complex weighing transactions and providing easy analysis of transaction data throughout organisations.

Mettler Toledo’s DataBridge MS vehicle scale software package is a readyto-deploy solution, meeting the transaction management needs of large and growing organisations without the lengthy development time and high cost associated with custom-built programs.

The highly configurable software comes with optional modules, maximising flexibility and speeding up deployment.

DataBridge MS weighing software is capable of controlling multiple vehicle scales, and supports multi-directional weighing, traffic controls, status alerts and unattended scales. The program can adapt to the organisation’s expanding and changing needs through definable user roles, custom transaction criteria, and add-on modules. Regular updates and training resources ensure that the product and its customers stay current.

Mettler Toledo DataBridge product manager Santosh Nachu explains that ease of use is one of the main benefits of DataBridge software. Mettler Toledo has created a clean, highly graphical interface with intuitive features to meet the specific needs of each level of user from the scale operator accessing customer records to the operations manager analysing quarterly business performance.

The DataBridge development team also studied how weight transaction data was used throughout an organisation. By approaching the product from the perspective of different categories of users across the organisation, Mettler Toledo has been able to ensure the software benefits everyone including scale operators, operations managers, finance controllers, IT departments and company executives.

• Mettler Toledo 1300 659 761 www.au.mt.com

CAN TEST DRILL CORES INTACT WITHOUT BREAKING THEM

AUSTRALIANMINING

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DECEMBER 2014

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PRODUCT SHOWCASE

WELDING HELMETS Lincoln Electric has released its latest welding helmet, the Viking PAPR 3350 helmet.

Its PAPR (Powered Air Purifying Respirator) is a complete powered system that draws air from the environment through a HEPA filter located on the belt and delivers filtered air in the breathing zone within a premium-level Viking autodarkening welding helmet.

This model, which offers dual

airflow speed, is powered by a battery that can last a full eight-hour shift without interruption.

A patent-pending adjustable baffling system inside the helmet directs airflow away from the eyes to avoid dryness. The lightweight design of the helmet and belt pack allow for unrestricted movement.

The VIKING PAPR is equipped with a 3350 Series Welding Helmet that has a perfect 1/1/1/1 optical clarity rating (EN379).

• Lincoln Electric www.lincolnelectric.com

THE ACTUATOR CAN BE REMOTELY OPERATED AND CONFIGURED

SECURE REMOTE MONITORING

HAS A DUAL AIRFLOW SPEED

DATA MANAGEMENT Database services provider in Western Australia and Asia Pacific, Expedio recently launched its OCRIS suite of software products developed specifically for the mining and resources industry.

The OCRIS suite allows fast and accurate data management while streamlining exploration data collection.

Rotork Australia introduces the new Remote Hand Station designed for safe and secure local monitoring and control of Rotork IQ3 actuators installed in inaccessible locations.

Designed for wall or pole mounted installation, the Remote Hand Station provides the user with an exact replica of the actuator’s monitoring and control interface at a distance of up to 100 metres from the valve. Powered by the actuator, with which the unit shares all the benefits of

Based on OCRIS Logix, a set of rules combined with a stringent workflow procedure to ensure accuracy and compliance each step of the way, the new software has been developed by Philip Little who used his years of hands-on data management service delivery experience to create a product that was easy to use, compliant and produced always accurate data.

According to Little, mining and

AUSTRALIANMINING

the same IP68 double O-ring sealed environmental enclosure, the Remote Hand Station does not require expensive cabling; only the standard communications wiring suitable for the operating environment is required between the actuator and the Remote Hand Station.

The actuator can be remotely operated, interrogated and configured by the user with the Rotork handheld setting tool and its secure wireless Bluetooth link. By retaining all of the actuator’s functionality, the Remote Hand Station presents an identical window into the process, showing diagnostic data including the valve torque

exploration companies spend millions of dollars on exploration, but securing finance for their projects could be difficult if their data is not reliable. He adds that investing in accurate and compliant data using OCRIS costs less than one per cent of the amount to drill a hole.

Expedio managing director Lara Groves said this end-to-end system maximises the value of data derived from exploration by enabling the

43

DECEMBER 2014

and usage profiles along with service logs, and facilitating real time analysis directly at the unit.

Information from the actuator data logger can also be downloaded and transferred to a PC for analysis using Rotork Insight2 diagnostic software to enable valve maintenance requirements to be identified and anticipated.

The Remote Hand Station is available with explosion proof certification and can also be equipped with a vandal proof cover to prevent unauthorised interference.

• Rotork 1300 117 044 www.rotork.com

collection of JORC compliant data, which gives financiers and brokers confidence, and simplifies the process for miners to move from exploration to production and then expenditure to revenue. OCRIS offers a scalable solution to ensure rapid, accurate data and covers all stages of of exploration and mining projects.

• Expedio www.expedio.com.au

AM1214_044

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MINING JOBS

UPDATED DAILY TO SEE THE LATEST JOBS VISIT WWW.MININGAUSTRALIA.COM.AU

FRANNA OPERATOR/ YARDSMAN

currently seeking experienced Drilling operators for their drill and blast department.

Perth

This is a great opportunity to

TECSIDE Personnel is a

work with an industry leader

national supplier of Recruit-

at an established mine and

ment Services to the Oil &

these positions are ongoing

Gas, Industrial, Engineering

at present.

and Construction sectors.

To be considered for this role

We have been established for

you must have:

over 10 years.

• skilled in operating Atlas

TECSIDE Blue is seeking

Copco Pit viper is preferred

the services of a Franna

• Prepared to work a 7/7 D/n

Operator/Yardsman for an ongoing contract with a global Subsea company working at their new large workshop.

TO BE CONSIDERED YOU WILL REQUIRE: • Franna Crane License • A minimum of 1 year experience in a similar position

roster • Dozer skill will be advantageous but not essential • Large diameter drill ticket and experience • Be living with in 100km radius of Brisbane airport

Carrier, IT Loader and carrying

To be considered for this role

COnTACT DETAILs: DAn

you must have:

DOBE, CHAnDLER mACLEOD –

• 2 x contactable referees

Applicants will need to be able

• min three years shot Firing

07 3003 7705

IF YOU FEEL YOU HOLD THE

to demonstrate and prove

out Service Crew works.

their previous underground

environment

YOU HAvE A sTROng FOCUs

expereince, as well as their

On sAFETY THEn PLEAsE

commitment and leadership

APPLY BELOW.

towards health and safety

REFEREnCE nUmBER:

on site. Applicants with the

Chandler macleod are looking

100820A

following qualifications will be

• A focus on safety

for an experienced Dragline

COnTACT DETAILs: DAn

very highly regarded – Working

• Be living with in 100km

Operator for an immediate

DOBE, CHAnDLER mACLEOD –

at Heights, Integrated Toll

07 3003 7705

Carrier, IT Loader and

• An up to date resume • standard 11 • Passport or Birth certificate and drivers licence

• Hold a current qld shot Firers License

DRAGLINE OPERATOR

• good knowledge of the explosives industry

YOU WILL BE REWARDED WITH:

• 2 x referees

radius of the Brisbane

start. This is a FIFO role out of

• Excellent hourly rate with

IF YOU FEEL YOU POSSESS

airport

Brisbane working a 7/7 D/n

THE REqUIRED ATTRIBUTEs,

You must be able to supply:

roster, flights and accom-

• Weekly pay with Tecside

AnD YOU HAvE A sTROng

• Coal board medical (must be

modation is provided. You will

• Ongoing contract

FOCUs On sAFETY THEn

with in the first 24 months)

IF YOU HAvE THE RELEvAnT

PLEAsE APPLY BELOW

• Current s11

for the production mining

qUALIFICATIOns AnD ExPERI-

REFEREnCE nUmBER:

• Passport or driver licence

team with in the dragline, drill

EnCE As mEnTIOnED ABOvE;

100833A

PLEAsE CALL RYAn CORP On

COnTACT DETAILs: DAn

6436 2909 OR EmAIL YOUR REsUmE TO RYAnCORP@

penalties rates

and drivers licence)

current: with in the first 24 months)

• EWP (Preferred)

Toro Truck, Integrated Toll

• Passport or (Birth certificate

REqUIRED ATTRIBUTEs, AnD

• Ability to work with different

skills

• standard 11

100850A

experience in a coal mine

• Coal board medical (must be

• Excellent communication

REFEREnCE nUmBER:

in an open cut coal mine.

You will need to supply

• Excellent organisation skills trades

ing and firing of bulk explosives

and birth certificate

help provide leave coverage

Underground Dump Truck

UNDERGROUND – NIPPER/JUMBO OFFSIDER

Recognition of Prior Learning.

These are approximately 6 month positions. must be available to start AsAP. Subject to full pre employment

and blast area.

Regional WA

medical, DAs and police

• 2 x contactable referees

To be considered for this role

Broome & Kimberley

clearance.

DOBE, CHAnDLER mACLEOD –

IF YOU FEEL YOU POSSESS

you must have:

Our Client is a leading

REFEREnCE nUmBER:

07 3003 7705

THE REqUIRED ATTRIBUTEs,

• Be residing with in 100km

mining contractor seeking

752J201435038

TECsIDEBLUE.COm.AU

AnD YOU HAvE A sTROng

radius of the Brisbane

experienced Underground

WORkPAC

REFEREnCE nUmBER:

DEsIRE TO BE A PART OF A

airport

Operators for positions at

WWW.WORkPAC.COm

3049RC1

DRILL OPERATOR (COAL MINING)

SHOTFIRERS

COmPAnY THAT WAnTs YOU

• Previous experience on

TO SUCCEED, SUPPLY YOU

marion Draglines 8050 and

Kimberley. They currently have

Our Client is looking for a shot

WITH A COmPETITIvE REmU-

D11 Dozer

vacancies for Underground

firer for an immediate start

nERATIOn On A POTEnTIAL

You will need to supply:

Nipper/Jumbo Offsider on a

working on a 7/7 roster FIFO

OngOIng COnTRACT WITH

• Current Coal board medical

2:2 FIFO roster from Perth

responsible for delivering, load-

APPLY nOW!

A M 1 2 1 4 _ 0 0 0 _ Lout E ofUBrisbane.

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Global mining company are

their remote mine site in the

AUSTRALIANMINING

months)

44

DECEMBER 2014

UNDERGROUND – AGI DRIVER

or Darwin. The duties will

Regional WA

involve operating a Sandvik

Broome & Kimberley

AM1214_045

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2014-11-25T14:25:27+11:00

MINING JOBS

Our Client is a leading

WORKPAC

mining contractor seeking

WWW.WORKPAC.COM

experienced Underground Agi Truck Operators for a position at their remote mine site in the Kimberley. The duties will involve operating an Hitachi

CHPP OPERATOR/ MAINTAINER (MECHANICAL)

AH300 truck that has been

WorkPac currently has a

E: NICOLE.GRAY@WORKPAC.

(must be with in the first 24

number of opportunities for

COM

months)

experienced Dump Truck

• Current coal board medical

• Standard 11

Operators with solid coal min-

• Passport or (Birth certificate

ing experience. You will need

and drivers licence)

to make yourself available for

• Reside within 100 klms of the Brisbane Airport - this needs to be your permanent place of residence. Ap-

MOBILE PLANT OPERATOR – RD 797 CAT

• Current BMA or Standard 11 • Current Coal Board Medical

• 2 x contactable referees

a start early December with

• Licences and qualifications

this role going through to the

• Residence with in 100km

beginning of March, with a

Regional QLD

plicants outside of 100klms will not be considered Statement of Attainment

converted to an Agi truck

Chandler Macleod are

for Underground concreting

currently seeking Four

possibility of extension.

Mackay & Coalfields

works. Applicants must

experienced CHPP Operators/

If you feel you possess the

To be successful in these roles

MULTI-SKILLED OPERATORS

have proven Underground

Mechanical Maintainers for

required attributes, and

you will have the following:

• FIFO exit Brisbane

experience and experience

an immediate start. You will

you have a strong focus on

• 2 years + experience

• 7 on 7 off

support your experience on

operating Agi trucks for

be working for one of the

safety then please apply

working as a Dump Truck

• November/December start

dump trucks, dozers and

underground or surface.

biggest mining companies in

below now. Please support

Operator within a production

WorkPac currently have a

Suitable applicants must

Australia and it’s a mine site

your application with a Cover

coal mining environment -

number of opportunities for

Current drivers licence

be able to present copies of

that is well sort after plus the

Letter and only short listed

CAT 793 (minimum)

experienced Multi-Skilled

PLEASE NOTE: These roles

tickets and underground RPL’s

opportunity to work on a 7/7

candidates will be contacted

Operators with solid coal

are FIFO only and will only

on application. Successful

day shift roster.

at this stage.

mining experience. You

be offered to experienced

candidates be able to demon-

Skills required:

REFERENCE NUMBER:

• Current Coal Board Medical

will need to make yourself

MS Operators with proven

strate their commitment and

• Fixed plant fitter qualifica-

102041D

(essential it is dated within

available for a start on the

coal mining experience who

CONTACT DETAILS: DAN DOBE

the last 2 years)

26th / 27th November or the

reside within 100 klms of the

3rd December. These roles

Brisbane Airport. There are no

support your experience on

are ongoing for 6 months at

entry level roles available.

dump trucks, dozers and

this stage, with a possibility of

REFERENCE NUMBER:

graders

extension.

7226J20147923

• Current drivers licence

To be successful in these

DON’T DELAY YOUR APPLICA-

REFERENCE NUMBER:

roles you will have the

TION AS THESE ROLES WILL

7226J20147922

following:

BE FILLED VERY QUICKLY.

Regional QLD

DON’T DELAY YOUR APPLICA-

• 2 years + experience work-

FOR FURTHER INFORMATION

Mackay & Coalfields

TION AS THESE ROLES WILL

ing within a production coal

PLEASE CONTACT:

DUMP TRUCK OPERATORS

BE FILLED VERY QUICKLY.

mining environment as a

NICOLE GRAY

• CAT 793 operators

FOR FURTHER INFORMATION

Multi-Skilled Operator - CAT

P: 53901322

• 6 on 6 off

PLEASE CONTACT:

793 (minimum), D10 and

E: NICOLE.GRAY@WORKPAC.

D11 dozer as well as series

COM

leadership towards health and safety on site as this is paramount in the Underground

tion • Fixed plant processing • Fixed plant maintenance

is FIFO from Perth on a 2:2

• Minerals processing operations experience

and night shifts. These are ap-

• CHPP Operations experience

proximately 2 month positions

• Relevant processing RII

working through till the end of December. Must be available to start ASAP. Subject to full pre employment medical, DAS and police clearance.

Materials Handling

REFERENCE A M 1 1NUMBER: 1 4 _ 0

Statement of Attainment

• RIIs/competencies to

qualifications • Maintenance management systems experience • Hydraulic system maintenance

MOBILE PLANT OPERATOR – LEVEL 3

0 0 _ UYou N will I 2need- to supply 1 2 0 1 4 -• December 1 0 - 1 to6 March T 1 1 : 1 8 : NICOLE 3 8 + GRAY 1 1 : 0 0 current:

• Moranbah area

P: 53901322

(essential it is dated within the last 2 years) • RIIs/competencies to

graders

16 or 24 grader

Anchor chain

752J201435040

– 07 3003 7705

• Current BMA or Standard 11

experience

environment. This position roster, working 12 hour day

radius of Brisbane airport

DECEMBER 2014

12

45

Materials Handling

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EVENTS

CONFERENCES, SEMINARS & WORKSHOPS EvEnT SuBMISSIOnS CAn BE EMAIlEd TO EdITOR@MInIngAuSTRAlIA.COM.Au

TECHNOLOGY AND PRODUCTIVITY IN MINING CONFERENCE 2-3 DECEMBER PERTH, WA The Technology & Productivity in Mining conference will analyse the key role played by new technologies to improve mining productivity, and how the computerisation and automation of the industry are leading the next industrial revolution.

In a period of profound technological and cultural change, this conference will analyse the key role played by new technologies to improve mining productivity, with a renewed focus on the critical role played by humans to manage these technologies.

Topics that will be discussed at this forum include improving production and efficiencies; process monitoring and optimisation; integrated remote operation centres; integrated mining value chain; the wider convergence of IT & OT; mobility and skills in the workplace; the latest technological innovations and their applications in the sector; and working towards a future mining model by learning from other industries.

• Informa 02 9080 4300 info@informa.com.au

11TH SA EXPLORATION AND MINING CONFERENCE 5 DECEMBER ADELAIDE CONVENTION CENTRE, ADELAIDE, SA The South Australian Exploration and Mining Conference (SAEMC) has been held annually near the end of the year (last Friday in November or first Friday in December) since 2004. It is designed

to provide an opportunity for active SA mineral explorers and miners to present succinct technical updates to their peers of activities on their flagship mines and exploration projects.

Participants will gain a comprehensive appreciation of the diverse activities in the State and gain ideas from each other which will collectively improve the State’s chances of mineral discovery and improved mining developments.

The conference is organised by a voluntary committee representing the local branches of professional associations (AIG, ASEG, AusIMM & GSA). Representatives from SACOME, Department of State Development and the University of Adelaide have also joined the committee.

• SACOME Megan Andrews 08 8202 9955 www.saexplorers.com.au

X-FEST 2014 4 NOVEMBER16 DECEMBER CHINA/INDIA/ SOUTH KOREA This year’s X-fest program features twelve technical courses based on Xilinx’s All Programmable devices, including the newly introduced UltraScalet product family. Participants can choose up to four courses from any of the three educational tracks: Zynq and the Internet of Things (IoT), Design Essentials, and Techniques and Applications. In addition, attendees will have the opportunity to interact with industry experts and view hands-on product demonstrations featuring real-world solutions from top suppliers.

“As we open registration for our 2014/2015 global X-fest seminar series, I think back to our very first X-fest program 20 years ago,” said Tim Barber, Senior Vice

President, Design Chain Business Development, Avnet Electronics Marketing.

“At the time, social media mogul Mark Zuckerberg was just 10 years old and the world hadn’t even heard of a smartphone. So much has changed, but one thing that has remained constant is Avnet’s commitment to harnessing the power of our broad ecosystem of suppliers to provide engineers with the state-ofthe-art products, tools and training they need to bring groundbreaking new devices to market,” he explained. · Avnet X-Fest www.xfest/eng/index

AUSTMINE LEADERSHIP SERIES 29 JANUARY 2015 SYDNEY Austmine provide members with insights on industry trends, developments in offshore markets, new mining projects, innovation and technology, as well as national and international policy and regulatory matters that affect the demand and supply of the METS industry. This leadership series is designed to give mining suppliers the tools to help their company become more efficient and link with mining operators.

• Austmine Rosie Atherfold 02 9357 4660 rosie.atherfold@austmine. com.au www.austmine.com.au

GOLD FIELDS & UNEARTHED – DRIVING INNOVATION IN THE RESOURCE SECTOR THROUGH OPEN INNOVATION 12 FEBRUARY 2015 WACA, PERTH, WA Austmine has a huge focus on promoting innovation and encouraging Australian METS to voice their ideas, and strives to provide platforms where opportunities for improvement and innovative thinking can meet to solve many of the challenges facing the mining industry today.

Productivity in mining is

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key to reducing costs and remaining competitive in this current phase of the mining cycle, and a key factor in increasing productivity is innovation.

Unearthed, Gold Fields, and others have teamed up in an effort to encourage start up companies to tackle some of mining’s key issues when it comes to productivity. The presentation will cover the questions of – What is open innovation like Unearthed and how can it benefit industry, and what industry challenges are a good fit to be addressed with open innovation and which ones are not, as well as how are other industries benefiting from this approach.

• Austmine Rosie Atherfold 02 9357 4660 rosie.atherfold@austmine. com.au www.austmine.com.au

Austmine has a huge focus on promoting innovation and encouraging Australian METS to voice their ideas, and strives to provide platforms where opportunities for improvement and innovative thinking can meet to solve many of the challenges facing the mining industry today. This event is designed to help suppliers and manufacturers of mining equipment and services in South Australia to connect with others in the METS sector and those in the state’s mining industry.

• Austmine Rosie Atherfold 02 9357 4660 rosie.atherfold@austmine. com.au www.austmine.com.au

successful events, the 3rd Annual Control Room Design & Operation Conference will take place at the Rydges Melbourne on the 3-4 March 2015. The event is the best and only cross sector event bringing together a host of case studies and up-to-date insight into streamlining operations, optimising efficiency & managing costs in your control room facilities.

Speakers confirmed to date include Michael Whelan, General Manager Operational Excellence, Transurban; Geoff Ross, Airservices Australia; Ron Whalen, Independent Commentator; Professor Mark Wiggins, Macquarie University; Russell Ockenden, Control Centre Built Environment Design Consultant; Fiona McDonald, Ergonomist, Absolute Injury Solutions; Andrew Eckersley, Team Leader, Traffic Management Centre, VicRoads; Mark Holmes, Chairman, Circadian Australia; and John Devine, General Manager Supply Chain & Customer Service, Patrick Terminals & Logistics.

Topics to be covered include future proofing the control room – Designing for now and the future; upgrading and transforming older control rooms; the intelligent control room – combining function and ergonomics to cure operator fatigue; remote control rooms & disaster recovery procedures; incident management; alarm management and rationalisation; human staffing issues; ‘virtual’ control rooms; future of operations and how technology may transform the capability of operation rooms; and the transfer to digital control rooms.

• Informa Bruce Ewan 02 9080 4023 bruce.ewan@informa.com.au www.informa.com.au

3RD ANNUAL CONTROL ROOM DESIGN & OPERATIONS CONFERENCE 4-5 MARCH 2015 RYDGES, MELBOURNE, VIC

MINE SITE AUTOMATION & COMMUNICATION WA 2015 11-12 MARCH 2015 FRASER SUITES PERTH, PERTH, WA

Following on from the past 2

Over the last 18 months

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there has been a significant shift in how mining companies are operating.

There is an urgent need to make operations more efficient and productive, combined with the rise of innovative technology.

Satellite communication or autonomous equipment are the latest examples of how the sector continues to adapt and evolve.

Mining companies are striving to gain a holistic view of automation and communication on mine sites to maximise productivity and minimise operating cost. Those already in the process of automation have been able to make significant improvements in the areas of productivity, efficiency and safety – all of which positively impact the company’s bottom line.

Are you maximising on opportunities to increase efficiency, improve production output and reduce operational costs?

Key themes include: Innovation in Mine Automation – next generation mining; Securing Communication Networks: reliability and availability; and the Human Factor: driving productivity through culture and training.

• IQPC www.mineautomation. com.au

ASIA MINING CONGRESS 2015 25 MAY 2015 SINGAPORE For the past 10 years, the Asia Mining Congress has established itself as the leading industry platform in Asia for global and regional miners, resource oriented investors, commodity buyers and sellers, policy makers and industry stakeholders to meet, network and discuss the growth and investment opportunities in the global mining sector. In its 11th year, we will continue to be the only mining investment event in Southeast Asia to offer an extensive conference programme alongside a strategic 1-1 meetings facilitation service. · Terrapin www.terrapin.com/ asiamining

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MONTH OF SUN SAVES YOU A TRUCKLOAD OF DIESEL Become more independent in the use of energy with intelligent technology from SMA. More details at www.SMA-Australia.com.au

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