Tag Archives: AutoHaul

Rio Tinto continues to invest in Pilbara haul truck automation

Rio Tinto, in its half-year results, provided an update on its haul truck automation efforts at its iron ore mines in the Pilbara of Western Australia, saying it expects to hit some significant milestones by the end of 2019.

The company, one of the first adopters of autonomous haulage systems through a commercial trial at its West Angelas operation all the way back in 2008, said it had continued investing in productivity and automation in the first six months of 2019 and expected 50% of its iron ore truck fleet to be fully autonomous by the end of the year.

The company said: “Deployments are complete at seven of our sites, with Hope Downs 1 and Marandoo in transition.”

Last week, Fortescue Metals Group (FMG) said its plan to automate all haul trucks across its Pilbara iron ore network was going to plan, with 128 trucks running in autonomous mode as of the end of June.

Meanwhile, Rio said its AutoHaul project, which sees 2.4 km long trains travel across a network of 1,700 km of track, all monitored remotely from an operations centre in Perth, was now fully operational. These trains have safely travelled more than 4.5 million kilometres autonomously since they were first deployed last year.

Rio and Hitachi Rail STS celebrate AutoHaul achievements

Rio Tinto and its lead technology partner on the AutoHaul™ project, Hitachi Rail STS, joined together today to celebrate the successful deployment of the world’s first automated heavy-haul long distance rail network.

AutoHaul trains, which deliver safety and productivity benefits for Rio Tinto’s iron ore business, have also firmly positioned Western Australia and its heavy-haul rail industry as a global leader in the joint development and application of rail technology, Rio said.

Today, 2.4 km long trains, monitored remotely from an operations centre in Perth, travel across a network of 1,700 km of track, delivering iron ore from 16 mines to ports in Dampier and Cape Lambert in Western Australia. These trains have now safely travelled more than 4.5 million kilometres autonomously since they were first deployed last year.

“This world-first was made possible by the close collaboration with project partners from Japan, US and Australia,” Rio said. “These include Hitachi Rail, Calibre, New York Air Brake, Wabtec and others who provided the necessary expertise, innovation and software to make AutoHaul a success. Several of these partners maintain a strong presence in Western Australia and have committed to continuing to invest locally.”

Rio Tinto Iron Ore Managing Director Rail, Port & Core Services, Ivan Vella, said: “The success of AutoHaul would not have been possible without the expertise, collaboration and dedication of teams within Rio Tinto and our numerous partners. I’d also like to commend our train driving workforce for their support and professionalism during the transition period.

“This project has cemented Western Australia as a leader in the heavy-haul rail industry and has attracted interest from around the world. The successful deployment of the world’s first heavy-haul long distance rail network demonstrates the potential for significant further improvement in such operations with others around the world looking to replicate.”

Western Australia Minister for Mines and Petroleum Bill Johnston, who also joined in with the celebrations, said the AutoHaul project is a world-first and an example of the strength of Western Australia’s resources industry, which continues to excel in technology and innovation.

“I’d like to congratulate Rio Tinto, Hitachi and all the other project partners for their hard work and dedication over the past decade to delivering this project, which really cements our State as a global leader in rail technology,” he said.

“AutoHaul has brought the rail freight industry in this country into the 21st century and is rightfully the subject of global interest. I’d also like to mention that the development of the world’s biggest robot is such a success because of the contribution from Western Australia’s skilled engineers and innovative workers.”

Michele Fracchiolla, President Americas and APAC Business Unit, Hitachi Rail STS, said: “Hitachi Rail STS is extremely proud of the lead technical and delivery role it played in enabling the deployment of the world’s first fully-autonomous heavy haul, long distance rail operation.

“This is a new technical benchmark for the freight rail industry worldwide and the result of a long-established and collaborative partnership between Rio Tinto and Hitachi Rail STS. Now that the trains are running autonomously, the levels of continuous improvement that can be achieved in safety, operational efficiency and sustainability are endless, and we look forward to continuing to collaborate with Rio Tinto to enhance the AutoHaul system.”

Early results from the deployment of the $940 million AutoHaul program highlight the technology’s potential to improve productivity, increase flexibility and reduce bottlenecks in Rio Tinto’s iron ore system, the miner said. “Rio Tinto’s Pilbara operations are being transformed to flex in line with market conditions and AutoHaul is a vital component in increasing flexibility and safety in the system.”

Rio operates about 200 locomotives on what is the largest privately-owned rail network in Australia and, in December, the deployment of software on Rio Tinto’s locomotives was completed.

“Autonomous trains improve safety through reduced risk at level crossings and automated responses to speed restrictions and alarms,” Rio says. “AutoHaul also removes the need for almost 1.5 million km of road travel per year previously required to transport drivers to and from trains mid-journey.”

All locomotives are fitted with AutoHaul safety systems including collision detection systems, automatic train protection technology – which controls train speed to ensure adherence to speed limits – and an on-board video camera to record the front view from the train.

The average return distance of these trains is about 800 km with the average journey cycle, including loading and dumping, taking about 40 hours. All public rail crossings on the network are fitted with CCTV cameras and have been upgraded to the highest safety standards, according to Rio.

Mine automation starting to take hold, RFC Ambrian says

In its second report in a series on innovation and new technology in the mining industry, RFC Ambrian has tackled the subject of autonomous mining equipment, which, the authors say, has reached an “important level of maturity”.

The report considered both surface and underground equipment, but most notably surface mine haulage trucks where there has been an area of significant focus for major mining companies.

As the authors said: “This has reached an important level of maturity, although it is still evolving and its penetration across the industry is still in its infancy.”

AHS

The Autonomous Haulage Systems (AHS) have evolved from improvements in GPS for positioning and navigation, developments in sensors and detection –particularly radar and LiDAR, improved computing power and on-board monitoring, faster and more reliable networks and internet connection, and the development of effective and accurate algorithms and software, the authors said.

“AHS has appeared , first, at large mine operations where the benefits have the largest impacts, due to the high component of fixed costs in an AHS operation, and in developed countries where there is a shortage of skilled workers and labour costs are higher,” they said.

Outlining the potential benefits of AHS is straightforward, but finding hard data to support it is more difficult, according to the authors.

“Companies have made suggestions about the scale of improvement, but they are light on detail, definitions are not clear, and the data varies between companies,” the authors said.

Suggested improvements in productivity have come from Caterpillar (15-20%), Fortescue Metals Group (30%), Komatsu (15%), and Rio Tinto (15%), according to the authors.

“These improvements are still meaningful, and corporate companies would argue that every mine is different and that the mining companies and original equipment manufacturers (OEMs) that have so far implemented AHS have the right to guard this proprietary information and hold on to the competitive advantage,” the authors said.

Autonomy in other surface equipment

The authors said they are also now seeing this same technology used to automate other operations in the surface mine. This includes drill rigs, dozers, loaders and ancillary equipment.

“Much of this equipment is currently, at best, semi-autonomous, although a few mines have implemented fully-autonomous drill rigs and dozers,” they noted.

“Moving this equipment to full autonomy offers significant production improvements, although the scale of actual savings is not likely to be as great as those achieved with AHS,” the authors said.

“However, we have not yet seen quantified the downstream benefits of the resultant improved drilling and blasting.

“The automation of earth moving machines provides another step to increased productivity within the mine. However, loaders face additional challenges as a result of the variability of the loading face and the risk of collisions with the haulage trucks.”

Due to the complex nature of the bucket-media interaction, developing automatic loading functions that are better than or equal to expert manual drivers with regard to performance is a highly difficult task, according to the authors.

“As a result, fully-autonomous loading is not yet commercially available. Some observers suggest that the implementation of fully-autonomous surface loading is still some five years away, while others believe that full automation is unlikely.”

Underground mining

When it comes to underground mining, the authors of the report said, as with surface mining, full autonomy remains the goal.

“Mining companies and contractors are constantly looking to use technological developments to better utilise their investment in equipment and human resources and improve safety,” the authors said. “Particular features of traditional underground mines are: long unproductive periods caused by re-entry times required for operators after blasting; and higher health and safety risks due to geotechnical and environmental challenges.

“The use of autonomy underground aims to increase the productivity of the equipment and improve the safety of the operators.”

While the aims remain the same, full autonomy in the underground mine is not as advanced as in the surface mine, according to the authors.

“Haul trucks are used less frequently in underground mines, although a few mines are using haul trucks with AHS. More underground mines perform a short cycle of loading, hauling and dumping from a draw point to a tipping point with LHD equipment.

“Implementation of autonomous systems underground for LHDs is occurring, however, as with surface loading, one of the major hurdles to automating LHDs is replacing human judgement required for filling the bucket.”

This has seen full autonomy being used for the hauling and dumping cycle, but semi-autonomy usually used for loading, according to the authors. “Successful trials of fully- autonomous LHDs have been achieved and Sandvik i-series now offers an automated bucket filling assistant as a standard function,” they said.

Underground drilling operations, meanwhile, are achieving increased levels of autonomy but are also presently only semi-autonomous.

Robotic rail operations

The authors then looked at autonomous rail haulage systems, a segment of the market that has gained in prominence in the past few years thanks to initiatives such as Rio Tinto’s AutoHaul in the Pilbara of Western Australia.

The authors said: “There has been some form of automation on worldwide metro systems for many years, but one area where autonomous technology has yet to gain a foothold is rail freight. Trials are underway in Holland and Germany but implementing autonomous train driving on a complex rail network, with passenger trains and freight trains, is more difficult than on a metro system.”

The one exception to this is in the mining sector and AutoHaul, they said, where Rio has completed commissioning of the world’s first fully-autonomous, long distance, heavy-haul rail network which is now in full operation.

Pace of implementation

Despite the acclaimed success and the relative level of maturity of the technology, the wider implementation of AHS does not appear to be happening very fast, the authors argue.

“The systems of both the two main suppliers (Caterpillar and Komatsu) are well proven and have delivered positive results, although, according to consultants, both systems also have examples of less-than-expected performance.

“Nevertheless, the technical issues appear relatively minor and there is interest right across the industry but, in spite of the potentially significant benefits, more mines are not now using AHS.”

There are a number of likely reasons for this, the authors said, explaining that one of the most important is a lack of skilled personnel.

“We believe there is a lack of in-depth knowledge of the technology and limited personnel with the requisite experience, skills, and training throughout the industry’s hierarchy,” they said.

“Further, there is a shortage of skilled autonomous operators, developers, and consultants, some of who are moving to the autonomous auto market.”

Important factors in the success of AHS appear to be the level of management commitment, planning, and focus in the implementation, with the best results reported from well-operated mining sites, the authors said.

“Another factor is likely to be limitations on equipment supply from OEMs for new equipment and truck conversions, either due to manufacturing backlogs or maybe market caution, limiting investment. This is allowing the OEMs to be more selective in their customers.”

The authors cautioned: “However, if the existing suppliers do not develop additional capacity quick enough this could create opportunities for additional entrants in to the market.”

Capital availability in the mining industry could also be an issue holding back AHS advancement, they said, although it is less tight than it has been in recent years.

“Certainly, some lower-margin operations might struggle to finance the capital, although the uplift in relative profitability could be transformational, with relatively quick paybacks,” they said.
And the historical conservatism of the mining industry is also likely to be a factor, the authors said.

“There is still a natural reluctance within the industry to adopt new or unproven technology due to the high capital cost involved and the potential operational and reputational risks involved.

“This will be compounded if the organisation has limited experience and limited access to the technology.”

You can read the full report here.

Glencore, Redpath and Sandvik in it for the long haul at Lady Loretta

Automation and equipment monitoring are helping Redpath Australia exceed expectations at Glencore’s restarted Lady Loretta zinc mine, according to a Sandvik Solid Ground story.

Glencore awarded Redpath Australia the Lady Loretta zinc mine contract in December 2017, encompassing the entire underground and surface operations and associated facilities management.

Redpath’s responsibilities at one of the world’s highest-grade zinc operations range from crushing the ore it extracts and loading it onto road trains for haulage to Glencore’s processing facility in Mount Isa, Queensland, to managing the camp and keeping lawns manicured, Sandvik said.

“Redpath also holds full statutory responsibility for the operation, a unique role for a contractor typically tasked with driving a decline or undertaking development and production,” Sandvik said.

John McKinstry, Redpath’s Operations Manager for Lady Loretta, said: “Operating a mine is an exciting proposition for Redpath. A normal contractor scope is to put down a heading or undertake a specific task, but we have a much broader scope here. The infrastructure’s already in place, so it’s quite a different role for a contractor. Being a life-of-mine contract is unusual in itself. Most mines evolve as you develop and find more ore, but this orebody is very well-defined.”

Redpath recommissioned the mine within months of winning the contract, firing the first development round in March 2018. Production ramped up quickly and, by July 2018, Redpath was meeting Glencore’s production and development targets. Monthly production grew to 100,000 t, with a full production capacity targeting 133,000 t/mth.

The contract length enabled Redpath to invest in a brand-new fleet for Lady Loretta, according to Sandvik.
McKinstry said: “We wanted to meet or exceed targets right from the start, so we brought in new, cutting-edge technology to minimise operating costs and maximise productivity, knowing that we’ve got a good life to work the equipment over and amortise assets.”

Two Sandvik DD421 jumbos with 10/16 split feeds have outperformed since commissioning, according to the mining equipment maker. Redpath has consistently achieved 400 m/mth of development using one Sandvik DD421, with the second serving as a backup and handling any rehabilitation work.

Ore is removed by a fleet of four Sandvik LH621 LHDs. Two are operated conventionally for development, manual production and truck loading while the other two are equipped with AutoMine Lite for remote operation.

“The 621, I think, in a lot of people’s eyes at the moment is probably the loader to be using in the bigger operations,” McKinstry said. “It’s a big machine. It’s a very productive machine, very comfortable machine for operators, and then having the AutoMine on top of that just means it really sells itself in many ways.”

Redpath’s motivation for implementing automated loading was simple: regain the productivity lost during each shift change, Sandvik said.

McKinstry said: “There’s a long period of time from when a blast occurs to when you can re-enter the mine. If we can operate those machines from the surface over shift change, we can pick up up to a couple of hours a day in productivity. The other thing about AutoMine is that it does the same thing time and time and time again without banging the walls. It really does just run the perfect line each time.”

Redpath runs three levels at any one time, optimising the loading process.

The connectivity provided by a Wi-Fi network underground has not only enabled Redpath to implement the automated loading from the surface, the contractor can also monitor and manage its fleet in real time through My Sandvik Productivity, the cloud-based version of OptiMine Monitoring, Sandvik said.

“OptiMine has been synonymous with equipment monitoring in the Australian mining industry since its first installation in 2014,” Sandvik said. “My Sandvik Productivity mobile fleet monitoring allows Redpath to keep tabs on equipment condition online and act more quickly to remedy any issues that arise.”

The solution provides detailed, readily analysed data. Each connected LHD collects data onboard and uploads it when it comes within range of a Wi-Fi antenna. The data can be accessed from any computer or tablet, according to Sandvik.

The condition monitoring helps Redpath’s Lady Loretta maintenance staff improve its predictive maintenance planning. My Sandvik Productivity also identifies trending behaviours that can damage equipment or shorten component life, revealing training opportunities, Sandvik said.

Lady Loretta Maintenance Manager, Shane Timothy, said: “When it brings up log codes and faults and alarms, it actually tells you what that means. So you can hover across your icons, for instance, where it says that there’s a brake fault, and it would tell you that your operator is perhaps pressing the brake and accelerator pedal at the same time, which isn’t something that we want them to be doing unless they’re going at a very low ground speed.”

McKinstry believes having better-informed operators who understand their equipment and its limitations will reduce downtime: “We hope that by giving operators the feedback that they’ll change their behaviour in their operation of the machines. And, if we can address it early, then I believe we’re going to get better availability out of this equipment.”

Variable rock mass pushes Rio off course at Oyu Tolgoi Underground project

Rio Tinto has said completion of the Oyu Tolgoi underground copper-gold mine, in Mongolia, could be delayed for several months as detailed geotechnical data has revealed the rock mass is more variable than previously envisaged.

Oyu Tolgoi Underground is Rio’s major copper growth project. When the underground mine is fully ramped up, the existing open pit and underground, combined, are expected to produce more than 500,000 t/y of copper.

In Rio’s 2018 results, the company said the underground project continued to progress last year with the construction of critical above- and below-ground infrastructure. Detailed engineering design work and overall construction progress was mostly on track, with the main focus, in 2018, being on underground lateral development, the fit out of shaft 2 (the main production shaft), support infrastructure and the convey-to-surface decline.

Recent achievements at the operation, owned 66% by Turquoise Hill Resources (THR) and 34% by the Mongolian government, with Rio Tinto holding a majority stake in THR, include the completion of the overland conveyor connecting shaft 2 to the coarse ore stockpile, significant progress on the second underground crusher and the expansion of the central heating plant, Rio said.

“Overall, the underground lateral development has been proceeding well, with a total of 19 km achieved at the end of January 2019, against our second annual reforecast target of 19.8 km,” Rio said.

But, for the second quarterly report in a row, Rio flagged delays in completing the underground project.

“With the structural, mechanical and electrical fitout of shaft 2, it is now clear that the completion of this technically complex installation and commissioning work will be delayed by several months,” Rio said. “Delayed completion of the shaft, which provides additional hoist capacity to accelerate lateral development, will further delay the date we reach sustainable production beyond the nine-month delay indicated in October 2018.”

Back then, difficult ground conditions had slowed progress in some areas of the underground development, but, as the lateral development has continued, Rio said it had learnt more about the rock mass around and under the orebody and has access to more detailed geotechnical data than was available from surface drilling.

“This data reveals there are areas of the mine footprint where the strength of the rock mass is more variable than anticipated in the feasibility study,” Rio said. “This will require some potentially significant changes to the design of some future elements of the development and the development schedule.”

Detailed design work is now underway as is the work necessary to estimate the impact on cost and schedule from these changes and the delay in commissioning shaft 2, Rio said, while admitting that first production was unlikely to occur in the September quarter of 2021 as previously guided.

There were still many positive development takeaways from the mining major’s 2018 results, in addition to the record $13.5 billion it returned to shareholders as part of last year’s operational performance.

This included, among others, an update on the Kemano hydropower project in Kitimat, British Columbia, and the latest on AutoHaul™, the world’s first automated heavy-haul, long distance rail network.

On the former, a $500 million project in its aluminium business where Rio is constructing a required second tunnel at its hydropower facility, the company said it was expecting to complete the project by late-2020.

It will supply the Kemano powerhouse with water from the Nachako Reservoir, creating a back up to the original tunnel built over 60 years ago.

“We completed the starter tunnel in December 2018 and began boring the main tunnel in January 2019,” it said.

The company is carrying out this excavation with a 1,300-t tunnel boring machine (pictured) that will dig 7.6 km of tunnel through a mountain as part of a project to enhance the long-term security of a clean power supply for the BC Works aluminium smelter.

On AutoHaul, Rio said, in December 2018, it successfully deployed the autonomous rail network.

“Since completing the first autonomous haulage run in July 2018, we have steadily increased the number of driverless journeys, with more than 1.6 million km travelled autonomously in 2018,” Rio said.

The programme is now focused on optimising autonomous operations, according to Rio.

Wood Mackenzie poses mine electrification and automation question

Electrification and automation will be key priorities for mining companies in 2019, new research from Wood Mackenzie has claimed.

In reviewing the research firm’s ‘Global trends: what to look for in 2019’ report, Wood Mackenzie Research Director, Prakash Sharma, said: “Building a world-class low-cost mining business seems to be the mantra.

“Major players, such as BHP, Rio Tinto and Vale, are increasing the share of electricity and automation in mining operations. The objective is to not only reduce scope 1 emissions (from their own activities) and air pollution, but also to lower human involvement and operating expenditure.

“By employing data analytics, companies are chasing productivity and efficiency and lowering costs as a result. The aim is to stay at the lower end of the cost curve should demand for traditional mining commodities fall.”

In 2017, BHP set a long-term goal of achieving net-zero scope 1 and 2 emissions in the second half of this century, while, in 2018, Rio Tinto announced successful deployment of AutoHaulTM (pictured), “establishing the world’s largest robot and first automated heavy-haul long-distance rail network in the Pilbara region of Western Australia”, Sharma said.

“The key question will be whether other mining majors follow this trend in 2019.”

In terms of adopting automated technologies, BHP and Rio are far from being alone.

Vale’s Brucutu iron ore mine in Minas Gerais, Brazil, is set to go fully-autonomous this year – as a fleet of seven new Caterpillar 240 ton (218 t) 793F CMD fully autonomous trucks is expanded to 13 – Fortescue Metals is continuing its manual-to-automation fleet conversion at Christmas Creek, in Australia, and Norilsk Nickel recently told IM it was looking to introduce a “fully-automated mine”.

This is only the start.

NGEx Resources and Filo Mining, which are looking to develop open-pit copper operations in South America, confirmed in the past few months they were looking to incorporate autonomous haul truck technology from the off. These admissions came in their prefeasibility studies, which are likely to pre-date mining operations by three to five years.

And, underground, Resolute Mining and Sandvik plan to fully-automate the Syama block cave mine in Mali this year. The mine started commissioning at the back end of last year, hit the first production stopes in December and is expected to ramp up to steady-state output of over 300,000 oz/y by June.

This is but a handful of trials and projects going on in the automated mining space, with the process plant end also seeing a number of innovative trials or installations to move away from manual mode.

On the electrification question, specifically, Sharma told IM that grid-connected mines were acting faster when it came to adoption compared with those operating remotely. “Shovels and drilling machines at surface mines are already using electricity. Up to 100 t dump trucks are using electric-motors (battery-operated) at some mines in China,” he said.

“At underground mines, electric machines are increasingly used but batteries are yet to take off.”

The latter isn’t the case in Ontario, Canada, where Goldcorp (Borden) and Kirkland Lake Gold (Macassa) are using battery-powered equipment underground in their load and haul and utility fleets. In Sudbury, Canada, too there have been a number of deliveries of such machinery to some of its world-renowned base metal mines. (You can hear more about this at the inaugural Electric Mine conference in April).

As with the majority of technology projects, finance is the biggest hurdle for widespread adoption, according to Sharma.

“Another issue is around the financial health of the mining companies. Some are not willing to re-invest due to uncertainty around the commodities they mine. Some are focused on diversification of portfolios. There are others who want to act quickly, consolidate and take first mover advantage to decarbonise,” he said.

“We believe the electrification and automation in mining will continue to expand and tightening environmental policies will drive the shift. But a ‘one-size-fits-all’ approach will not work,” he concluded.

Rio launches new Brisbane pioneer lab concept to encourage “21st Century thinking”

Rio Tinto has launched a new pioneer lab concept in Brisbane, Australia, as it encourages pilot projects to help move the company “into the 21st Century”, CEO Jean-Sebastien Jacques told an audience at the IMARC event in Melbourne, Australia, today.

The head of Rio told delegates that the company sent an open invitation to “the best and the brightest in Rio to nominate a colleague (or themselves) to join the lab for 12 months”. During this time, they would be emboldened to work through these pilots.

“We will also look even more to external sparring partners as well, in the very near future,” he said.

The news from the home of Rio’s growth and innovation hub came within a wide-ranging speech where Jacques reference Lord of the Rings, Avatar, Apple’s recycling goals and automotive companies Renault, Nissan and Mitsubishi.

On the digital evolution in mining, Jacques said: “I have absolutely no doubt in my mind that digital and data will be the fundamental game changer in our industry. New digital technologies from AI to the Internet of Things, and new biotech, will force us to be more imaginative.”

This ranged from drones that perform in-situ scanning, to deep-sea robots that mine underwater, to water-neutral processing that removes the need for slurry ponds, he said.

“In our view, digital and data will touch every part of the industry’s value chain. From exploration to marketing – and re-shape the way we work.

“Look at exploration: in the future, exploration innovation won’t only be about engineers and geologists but be about computer scientists and bioengineers. Even now, the huge amounts of data being collected means we can create ‘digital twins’.

“Look at mining and processing: we already have remote operations and haul trucks with connectivity so we can use predictive maintenance. And will 3D or 4D printing mean we no longer need to procure spare parts from miles and miles away. Will they be made on-site?”

On the supply chain and logistics, Jacques said the industry already had autonomous trains – its own AutoHaul system – but, maybe not far off, could be autonomous ships. “This will change the ball game on supply chain optimisation and customer intimacy.

“And lastly let’s look at marketing and trading: digital and big data will play a very big role here. And blockchain will help our customers from governments to consumers check the ethics and value of all our products. As well as their environmental credentials.

“Of course, the challenge for us all is how to apply AI and IoT in an industry where the introduction of new tech has often meant big capital outlays.

“And, clearly, we are not going to get out of bed tomorrow and become Microsoft, or another software company, that isn’t the point. The point is how do we move into the digital age in a way that means we retain a competitive advantage?”

He concluded: “The key to this is to start small, with technology and digital pilots and scale up, and also more fundamentally, adopt a brand new spirit of partnership.”

Rio updates on Koodaideri, AutoHaul, Amrun and OT underground in H1 results

Rio Tinto has released its financial results for the first half of the year and the company looks to be balancing profitability, growth investment and shareholder returns.

With EBITDA of $9.2 billion, up 2% year-on-year, operating cash flow of $5.2 billion and the same amount of net debt, the company has flexibility when it comes to where to put its money.

A number of sizeable divestments completed in the first half of the year – tied to coal and aluminium – have allowed the company to pay a $7.2 billion record interim dividend, but it has also greenlit $1.4 billion for what it calls “high-return growth” projects.

Projects under this banner include the Oyu Tolgoi copper-gold underground development in Mongolia, the Amrun bauxite project in Queensland and AutoHaul™, the company’s automated train haulage system in the Pilbara of Western Australia.

In addition to this, the company has agreed to provide $146 million to undertake initial work at its Koodaideri iron ore project in Western Australia, ahead of a final investment decision by the end of the year.

These funds will go towards detailed engineering work on key elements of Koodaideri, development of a rail construction camp and the first stage of an accommodation camp. Rio calls Koodaideri its first “intelligent mine” which, should it receive board and government approvals, will incorporate the “latest in high-tech advances in the industry” using increased levels of automation and robotics.

The prefeasibility study on Koodaideri included a 40 million tonne per year capacity dry crushing and screening plant, non-process infrastructure, product stockyards, rail loop and load-out and a 170 km AutoHaul rail link to the main line. This came with a capital cost of some $2.2 billion and potential for construction to commence in 2019, followed by first production in 2021. Phase two of Koodaideri could potentially take the operation to beyond 70 Mt/y.

In an update in June, the company said the Koodaideri feasibility study would use “data centric and advanced digital engineering to produce a digital twin of the asset”, while there was over 100 “innovation opportunities” within the FS.

The project is expected to deliver replacement tonnes to the company’s Pilbara operations as other mines come to an end of their lives.

In terms of AutoHaul, which the company has approved $940 million of spend on, Rio said around 65% of trains at the end of the June quarter had run in either driver attended or autonomous mode and more than 3.3 million kilometres had now been completed in this mode of operation.

The system, focused on automating trains transporting iron ore to Rio’s port facilities, received accreditation to run trains in autonomous mode from the National Rail Safety Regulator on May 18 and the first loaded autonomous journey took place on July 10. Full implementation of the autonomous programme is expected by the end of 2018.

At the $1.9 billion Amrun bauxite expansion project on the Cape York Peninsula, in north Queensland, development is advancing to plan with first shipment expected in the first half of next year. The stacker and reclaimer have been transported to site following completion of fabrication, while shiploader assembly is also nearing completion.

The Amrun expansion is expected to increase the company’s bauxite shipments by 10 Mt/y.

At the Oyu Tolgoi underground project, contractor numbers are approaching their peak, with a workforce of over 7,500 (89% Mongolian nationals) at the end of June.

Shaft two equipping and headframe fit-out as part of the $5.3 billion project is in progress, and the shaft five ventilation system has been fully commissioned and is now operational. Construction of the first drawbell at the block cave development is still expected in mid-2020.

When the underground is fully ramped up in 2027, Oyu Tolgoi is expected to produce more than 500,000 tonnes of copper a year.

Lastly, development of the A21 project at the Diavik diamond mine in Canada, which Rio owns 60% of, is ahead of schedule with first ore uncovered in March and the mine expected to be at full  capacity during the December quarter of 2018.

A21 is expected to sustain the mine’s production levels at 6-7 million carats and extend the life beyond 2023.