Western Australia has some of the world’s most ancient natural landscapes, dating back two billion years - also known as the Pilbara region.
Deep rocky canyons lead to peaceful plunge pools in the beautiful Karijini National Park. Hundreds of islands with dazzling white beaches and untouched coral gardens can be explored on the Dampier Archipelago and Mackerel Islands. And yet the Pilbara is home to a massive mining industry in crude oil, salt, natural gas and iron ore.
Mining in Australia occupies an important place in the nation‘s economy. Although it is one of the smaller divisions, it is the most important exporter. The Mining sector is expected to generate $203.9 billion in 2011-12, up from $138.8 billion in 2006-07, yielding annualized growth of 8.0%. Revenue is expected to grow by 5.5% in 2011-12, after expanding by 21.1% in 2010-11 as the division rebounded from the financial crisis. The Mining division is expected to generate about 8.0% of Australia‘s GDP in 2011-12. Its 2,500 firms employ 243,152 people, paying about $32.9 billion in wages.
The ‘engine room’
The Pilbara region of Western Australia continues to ex-perience unprecedented and accelerated growth in the mining, gas and oil sectors. It is for this reason referred to as Australia’s ‘engine room’. With exports running at more than $50 billion, its massive iron ore industry is the nation’s largest export earner, dwarfing all other sectors.
With new mining projects coming online worth billions of dollars and oil and gas projects, like the massive Gorgon Project worth billions more, opportunities for business in this booming region are at an all time high!
The Pilbara covers a total area of 507,896 square kilometers extending from the Indian Ocean to the Northern Territory border (including offshore islands).
The region comprises of four local government authorities - the Shires of Ashburton, East Pilbara, Roebourne and the town of Port Hedland and is home to mining and industrial complexes producing iron ore, copper, natural gas, salt and fertilizers.
And across its rugged landscape run some of the world’s largest privately owned railways. With major investments being made by multi-national conglomerates and the rapidly emerging ‘Junior Miners’, the Pilbara is a huge market place for everything from mining and engineering services to human resources, sea, land and air transport, IT and consumable products.
Internationally, iron ore miners are ramping up production to meet booming demand from Asia, with most of the growth in output set to come from the Pilbara where Rio Tinto, BHP Billiton and Fortescue Metals Group (FMG) dominate production.
New force and massive undertakings
Rio Tinto Ltd has recently announced a $US3.1 billion expansion of its Pilbara iron ore infrastructure and is increasing its annual infrastructure capacity. Fortescue Metals Group which calls itself the ‘new force in iron ore’ is a $17 billion company, producing 55 million tons a year (2011). Chinese-backed CITIC Pacific’s Cape Preston project is on target to produce 26 million tons of iron ore a year. Atlas Iron expects to double production to 12 million tons by 2012, while BC Iron expects to be producing 1 million tons a year from its 50-50 Nullagine joint venture with Fortescue, and Gindalbie Metals says its Karara project will soon be producing 2 million tons a year.
And it isn’t just iron ore that’s ringing the registers.
Chevron and its Joint Venture Participants - ExxonMobil and Shell - have embarked on one of Australia’s greatest resource developments – the Gorgon Project. With an estimated cost of $43 billion for the first phase of development of this massive natural gas project, Gorgon is set to drive regional economic growth and improve energy security for at least the next 40 years. Royal Dutch Shell CEO Peter Voser recently confirmed in Kuala Lumpur, ‘Australia, eventually, could rival Qatar as an energy exporter. It has more than half a dozen liquefied natural gas projects planned or under consideration.’ Fortescue Metals Group has opened a new berth in Port Hedland and sounded confidence in mining‘s future.
It is said the new berth will help bring FMG‘s iron ore export to 70 million tons per annum (mtpa) this year.
The development is the latest step in the company‘s ambitious plans to export 120 mtpa by 2013.
Big numbers game
In 2010, world crude steel production increased 15% to 1.4 billion metric tons – this marked a new record, only of temporary nature. Tomorrow, approaching 2020, China is planning to build around 20 new cities – every year. Today’s rail network in Australia is approximately 40,000km. China is planning to increase its rail network by 60,000km until 2020, with a significant proportion of it being high speed rail. As a comparison, Germany’s current railway network shrinks and amounts to 34,000km in length representing about 17% of Europe’s railway network. One can imagine how much steel needs to be produced to fuel this enormous hunger for growth in Asia. Current estimates suggest that by the year 2020, Chinese steel consumption could reach one billion tons per annum! This year already India is expected to become the third largest steel consumer after China and the United States, meanwhile overtaking Europe.
Back in 2010, China produced about 18.4 million vehicles while the US produced ‘only’ 8.6 million, Japan about 8.4 and Germany 6.3 million units. In China there are currently about 80 million vehicles on the road, however, the number of registered vehicles in China is set to skyrocket past 200 million by 2020 and to exceed 400 million by 2030.
Also back in 2010 the world’s crude steel capacity was about 1.4 billion tons. China’s steel production capacity alone is expected to rise from 0.79 billion tons in 2010 to 1.29 billion tons in 2015. This represents a total increase of 500 million tons per annum! A huge demand to be met.
Now, at least 1.6 tons of wet ore is needed to make one ton of steel. This means in order to increase the capacity needed by China in 2015 a processing of 800 million tons of wet ore is required per annum.
Ambitious targets
Today the total production of iron ore in the Plibara region amounts to 350 million tons per annum. According to Fortescue Metals Group, this is the amount the company wants to deliver alone by 2017. In order to achieve this the company reports it will need to operate 6 mines, 2 ports, 12 berths, 650 mine trucks, 7,400 ore cars, 9 process plants, 7 ship loaders, 1,200km of railway, 87 locomotives, 8 stackers, 7 train un-loaders and 7 ship loaders, and last some 15,000 camp rooms. In order to achieve this FMG needs to grow its production capacity by an average of 50 million tons every year until 2017.
Now, aiming at shipping 355 million tons per year means that FMG alone has to move almost one million ton of iron ore every day. This translates into 30 trains arriving at port, 7,200 ore cars dumped and 10 ships moved – each day!
Building high impact businesses
NMT Projects Australia and BBC Chartering help organi-zations like the Fortescue Metals Group in building their high impact businesses; businesses that directly and indirectly lead to create thousands of sustainable em-ployment opportunities for people around the world.
Earlier this year both companies worked together in de-livering about 70,000m³ of infrastructure components to the Salomon mining projects. Transporting overland conveyors or any other mining equipment may seem just a small part but it is an essential element in the chain of actions required to make such projects work. People from both companies take pride in working together and pursuing their missions supporting global economic development.
NMT relies on finding and sourcing suitable shipping solutions, e.g. by choosing from specialist shipping companies such as BBC Chartering, helping its clients to manage exceptional logistics.
People needed
Capital can be acquired, ships and equipment can be built, but people have to be won to realize this massive undertaking. Andrew Forrest, Chairman of Fortescue Metal Group shows his ambitions and concern about the fact that FMG operations will require about 34,000 people by 2017 and hence he puts huge emphasis on the training and career development of people, their early involvement and at any occasion he promotes equality of access to employment opportunities for any ethnic group.
Fortescue has been going new ways through their ‘Vocational Training and Employment Centers’ (VTEC) of which the company currently operates 25 across the country. These centers offer a path to employment, also aiming to overcome the disparity often discussed with regards to employment opportunities for the indigenous population. That, so Forrest claims, offers a ‘passport to an independent future’ to anyone who takes this possibility.
BBC Chartering is proud it was able to help another leading edge project progress. We like to thank NMT Projects Australia and complement the Fortescue Metals Group of not being ‘nudged to the abyss’. We appreciate Andrew Forrest’s statement held in an address to the National Press Club in Canberra this May: ‘It was determination; it was the clarity of thought to accept the world has changed – and the steadfast commitment to meet that challenge – that led to the success of Fortescue.