Tag Archives: Western Range

Civmec, CPB Contractors, Primero and MACA receive work on Western Range iron ore development

Comminution of minerals, Mineral processing, Mineral project development, Mining services, Steel and iron ore, , , , , , , , ,

Western Australian businesses have so far been awarded contracts totalling A$1 billion ($670 million) as construction progresses at the Western Range mine in the Pilbara, a joint venture between Rio Tinto (54%) and China Baowu Steel Group Co. Ltd (46%), Rio says.

In September, the two companies agreed to enter into a joint venture with respect to the Western Range iron ore project in the Pilbara, Western Australia, investing $2 billion to develop the mine. Western Range’s annual production capacity of 25 Mt of iron ore will help sustain production of the Pilbara Blend from Rio Tinto’s existing Paraburdoo mining hub. The project includes construction of a primary crusher and an 18 km conveyor system linking it to the existing Paraburdoo processing plant. Construction was expected to begin in early 2023 with first production anticipated in 2025.

The aforementioned contract awards include:

  • Civmec: awarded a contract valued at more than A$330 million for the construction of a new run of mine pad, primary crushing facility, overland conveying circuit, and modifications to the coarse ore stockpile and downstream conveying system;
  • CIMIC Group’s CPB Contractors: awarded a contract valued at approximately A$250 million to deliver the main infrastructure bulk earthworks;
  • Primero Group: awarded a contracted valued at approximately A$54 million for the design, supply, construction and commissioning of the non-process infrastructure facilities on site;
  • MACA: awarded a contract valued at approximately A$60 million to construct a camp pad and access road as well as crushing and screening work; and
  • Pilbara Aboriginal Businesses: contracts totalling A$39 million.

Western Range aligns with Rio Tinto’s local procurement strategy which aims to increase opportunities for Pilbara, West Australian and Australian businesses to be a part of the company’s supply chain. Last year, Rio Tinto increased its spend with more than 2,400 suppliers in Western Australia to A$8.6 billion. Of this spend, A$618 million was spent with Pilbara-based businesses and a record A$504 million was spent with Indigenous businesses in Western Australia. This included A$439 million spent with Traditional Owner businesses – an increase of 45% on the previous year, Rio says.

Construction at Western Range, which will help sustain production from Rio Tinto’s existing Paraburdoo mining hub, commenced in the March quarter of this year and is expected to support approximately 1,600 jobs.

China Baowu said: “We are very pleased to see the Western Range project is progressing smoothly, with huge benefits brought to business and local communities in Western Australia. Baowu is committed to becoming a world-class international company. We will promote overseas projects following ESG standards, aiming to contribute to the localisation of the project and community development.”

Rio Tinto Iron Ore Chief Executive, Simon Trott, added: “Rio Tinto spends billions of dollars with local suppliers across Western Australia and the Pilbara every year, helping support thriving communities across the state by providing local jobs for local people. The spending of A$1 billion with Western Australian businesses at Western Range marks a considerable milestone for both the project and those local businesses we are partnering with.

“The connection between Rio Tinto and China Baowu in the Pilbara extends more than 40 years and we are pleased to be further deepening our relationship through our joint commitment to study opportunities for the production of low-carbon iron in Western Australia.”

Rio Tinto and Baowu to invest $2 billion in Western Range iron ore development

Bulk handling, Comminution of minerals, Mineral project development, Mining equipment, Mining services, Steel and iron ore, , , , , , , , , , , , ,

Rio Tinto and China Baowu Steel Group Co. Ltd have agreed to enter into a joint venture with respect to the Western Range iron ore project in the Pilbara, Western Australia, investing $2 billion to develop the mine.

Western Range’s annual production capacity of 25 Mt of iron ore will help sustain production of the Pilbara Blend from Rio Tinto’s existing Paraburdoo mining hub. The project includes construction of a primary crusher and an 18 km conveyor system linking it to the existing Paraburdoo processing plant.

Construction is expected to begin in early 2023 with first production anticipated in 2025. The construction phase will support approximately 1,600 jobs with the mine requiring about 800 ongoing operational roles, which are expected to be filled by existing workers transitioning from other sites in the Paraburdoo mining hub.

Rio Tinto’s share of the capital costs are already included in the group’s capital expenditure guidance of around $9-10 billion for each of 2023 and 2024. Both parties will pay their portion of capital costs for the development of the mine, and mine operating costs, plus a nominal ongoing resource contribution fee calculated by reference to Western Range production volumes. There is no upfront consideration being paid by either party.

Rio Tinto and Baowu, which own 54% and 46%, respectively, of the joint venture, have also agreed to enter into an iron ore sales agreement at market prices covering a total of up to 126.5 Mt of iron ore over approximately 13 years. This volume represents Baowu’s 46% interest in the anticipated 275 Mt of production from Western Range through the joint venture.

Rio Tinto has a long history of successfully partnering and investing with customers to develop new mines in the Pilbara. Rio Tinto and Baowu’s partnership in the Pilbara dates back to the 2002 Bao-HI joint venture to develop the Eastern Range deposits in the Hamersley Ranges (Eastern Range) and Western Range, subject to a production cap of 200 Mt. It is now expected the production cap will be sourced entirely from Eastern Range, and this transaction will continue Rio Tinto’s relationship with Baowu through development of Western Range.

Rio Tinto Iron Ore Chief Executive, Simon Trott, said: “This is a very significant milestone for both Rio Tinto and Baowu, our largest customer globally. We have enjoyed a strong working relationship with Baowu for more than four decades, shipping more than 200 Mt of iron ore under our original joint venture, and we are looking forward to extending our partnership at Western Range.

“The development of Western Range represents the commencement of the next significant phase of investment in our iron ore business, helping underpin future production of the Pilbara Blend, the market benchmark.

“At the same time, Rio Tinto and Baowu continue to work together on low-carbon steelmaking research, exploring new methods to reduce carbon emissions and improve environmental performance across the steel value chain.”

Baowu Resources Chairman, Shi Bing, said: “The signing of the joint venture agreement for the Western Range project is a significant event in the history of cooperation between Baowu and Rio Tinto. We fully appreciate the persistent efforts of both teams in accomplishing the important achievement. The Bao-HI joint venture has been successfully operating for more than 20 years, leading us to a win-win result, and reaping friendship and trust.

“We hope that the two parties will deepen the mutually beneficial and win-win partnership, continue to carry forward the spirit of sincere cooperation and further expand cooperation in more fields and aspects on the basis of working together to operate the project well.”

Rio Tinto has worked closely with the Traditional Owners on whose country Western Range is situated, the Yinhawangka People, to co-design a Social and Cultural Heritage Management Plan for the project, designed to protect signiticant cultural and heritage values in the area.

The plan, which was agreed with Yinhawangka Aboriginal Corporation and announced earlier this year, outlines protocols for joint decision-making on environmental matters and mine planning.

Rio Tinto’s Paraburdoo hub is comprised of three operating mines, Paraburdoo, Channar and Eastern Range. Western Range contains two deposits, 36W–50W and 55W–66W, which are located within the Hamersley Basin of Western Australia. The deposits’ mineralisation is primarily hosted by the Brockman Iron Formation with additional detrital mineralisation present. The 36W–50W and 55W-66W deposits contain a measured resource of 22 Mt at 59.1% Fe, indicated resource of 102 Mt at 61.5% Fe and an inferred resource of 108 Mt at 61.4% Fe. The 36W–50W deposit contains a proven reserve of 109 Mt at 62.1% Fe and a probable reserve of 56 Mt at 61.7% Fe.