Jon Hobbs, Arrium: The Whyalla Port Expansion Project
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Jon Hobbs, Arrium: The Whyalla Port Expansion Project

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Jon Hobbs, General Manager of Whyalla Port – Mining, Arrium delivered this presentation at the 2013 Mining South Australia conference. The conference has been produced specifically for the South......

Jon Hobbs, General Manager of Whyalla Port – Mining, Arrium delivered this presentation at the 2013 Mining South Australia conference. The conference has been produced specifically for the South Australian mining and regional development community and represents a unique opportunity to hear the latest developments from the major projects, mines and explorers in South Australia. For more information on the annual event, please visit the conference website: http://www.informa.com.au/miningsa2013

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  • 1. Development of the Whyalla Port Mining South Australia Conference November 2013
  • 2. Introduction • In July 2013 Arrium Mining completed ramp up of expansion works at our Whyalla Port, achieving a doubling in export capacity promised to market in September 2011 • On behalf of all who worked on this project, I am pleased to tell you our story: – – – – The history of the Whyalla Port The Whyalla Port Expansion project Our new capability The challenges and project learning’s Copyright Arrium Limited © 2012. All rights reserved
  • 3. Whyalla Port – Historically 2 harbours Outer Harbour Iron Ore Jetty Inner Harbour with Bulk & Products Berths Existing Ore Storage Shed October 2011 Narrow Gauge rail line to outer harbour Owned and operated by Arrium Ltd and integral with the Steelworks site Copyright Arrium Limited © 2012. All rights reserved
  • 4. Whyalla Port History ~110 years The first iron ore loading jetty was completed in 1901 together with a tramway of some 60km from Iron Knob Now referred to as the Outer Harbour, a modern jetty #2 has since replaced the timber Copyright Arrium Limited © 2012. All rights reserved
  • 5. Whyalla Port 2011 Outer Harbour Iron Ore Terminal Loading Jetty – 10.7m berth, 6.5mtpa capacity Copyright Arrium Limited © 2012. All rights reserved
  • 6. Whyalla Port History (cont..) In 1939 construction of the Inner Harbour and Shipyards commenced: – Since 1941 has supported the Iron and subsequent steel works, handling ~ 1.4 mtpa of bulk and break-bulk goods – Between 1941 and 1978 a total of 66 vessels built (now idle) Bulk berth Products berth Channel entrance Inner Harbour - basin with 2 berths (10.7m draft) on a 700m wharf Copyright Arrium Limited © 2012. All rights reserved
  • 7. Whyalla Port – A New Focus • In September 2011 Arrium Mining announced the acquisition of iron ore subsidiaries of WPG and a plan to increase iron ore exports from ~ 6 mtpa to in excess of ~ 13mtpa • Key value proposition is blending. Whyalla Port selected as central point and has deep sea access; – – Ores from the existing Middleback mines Ores from the new Peculiar Knob mine acquired from WPG As the Outer Harbour facilities were at capacity, this required an expansion of the Inner Harbour facilities by 6.5mtpa Copyright Arrium Limited © 2012. All rights reserved
  • 8. 1st challenge – Common Infrastructure • To use Whyalla Port for the Peculiar Knob mine required access to the standard gauge mainline • More difficult than assumed – Economy of scale required 1.8km trains – Train length longer than passing loop at Spencer Junction – No bypass to Port Augusta – Limited train paths due to limited passing loops • Added costs and complexity – Turn-outs at Wirrada and Whyalla – Passing loops on our own property - no confidence in time line if left to others – Restricted train length on the unloading loop as loco configuration dependent on Port Augusta shunt – Dual gauge on Steelworks site Copyright Arrium Limited © 2012. All rights reserved
  • 9. Whyalla Port Development The Expansion required construction of; – 7.5km SG rail line across Steelworks site & mainline connection – SG provisioning & holding lines on Steelworks site – SG Loco and wagon maintenance facilities on Steelworks site – 7.0km NG rail line across Steelworks site & Middleback line connection – A dual gauge train turning loop and unloading station – 2 ore storage sheds, each of 225kt storage capacity – 135m iron ore berth complete with 4,200 tph travelling shiploader while Retaining capability to service the Steelworks over the Bulk and Products berths and Without disrupting existing Mining & Steel operations Copyright Arrium Limited © 2012. All rights reserved
  • 10. Whyalla Port Expansion Std gauge provisioning & maintenance SG & NG rail turning loop Iron ore Berth Ore Storage sheds The Inner Harbour development has taken place on vacant, reclaimed land east of the Steelworks on the northern side of the harbour Copyright Arrium Limited © 2012. All rights reserved
  • 11. Whyalla Port Expansion Layout Copyright Arrium Limited © 2012. All rights reserved
  • 12. Rail Network March 2012 Mid October 2012 Copyright Arrium Limited © 2012. All rights reserved 25 October 2012 - Complete December 2012
  • 13. Train Unloading Station February 2012 October 2012 Copyright Arrium Limited © 2012. All rights reserved June 2012 December 2012
  • 14. Ore Storage Sheds April 2012 March 2013 Copyright Arrium Limited © 2012. All rights reserved August 2012
  • 15. Iron Ore Berth December 2012 May 2013 February 2013
  • 16. Shiploader Temporary radial loader Dec 12 – June 13 Permanent 4,200tph travelling loader July 13 16 June 2013 arrival of 4,200tph Cargotec Loader
  • 17. Whyalla Port 2013 Awaiting update from Paul Whitehouse
  • 18. Whyalla Port 2013 Inner Harbour – Northern Wharf Coal offloading at the bulk berth Billets loading at the Products Berth Iron ore loading at the new Iron Ore berth
  • 19. Whyalla Port Capability November 2013 • Regulation – Operated by the Whyalla Port Authority (part of Arrium Mining) in terms of H & N Act SA 1993 and Whyalla Steelworks Act 1958 • An Outer Harbour capable of >6 mtpa servicing Arrium Mining – – – – • Iron ore loading jetty of 3,000 tph capacity, and a 10.7m berth depth Iron ore storage shed connected to NG rail line 2 Capesize transhipment points at ~ 7.5 nm distance 1 Panamax transhipment point at ~ 5 nm distance A Handi-max capable Inner Harbour servicing Arrium Mining and the Steelworks – – – – 650m wharf, of 10.7m draft, with berths for bulk and general cargo 2 iron ore storage and blending sheds connected to both NG and SG rail lines 135m iron ore loading berth capable of > 7 mtpa Fleeting facilities for tugs Projected cargo July 13 to June 14 ~ 14m tonnes Copyright Arrium Limited © 2012. All rights reserved
  • 20. Project Challenges • Challenges – Safety – Aggressive timeline (Market guidance 1st ores 4th Q2012, rate July 13) – Ground conditions (Reclaimed land & buried services) – No disruption to operations (Rail, utilities, berths, roads affected) – Cost certainty • (Multiple contractors and high inherent risks) (We had given market guidance of $200m) Outcome – 2 MTI injuries in 700k man-hours – No uncontrolled environmental incidents – Achieved cost guidance – Achieved schedule guidance - First ore on Cape (Hsin May) 28 December 2012 (16 mths after first announcement) – July-Sept 2013 sustained > 12mtpa on a dry basis Copyright Arrium Limited © 2012. All rights reserved
  • 21. Whyalla Port Approach • Owning the strategic vision (business case  annual data  unit data) • Embracing the Planning Application process to refine scope • Clear, practical understanding of risk (beware of assumptions) • Good partners with clear understanding of ‘what success looks like’ • Local sourcing (95% of scope procured in Australia) Copyright Arrium Limited © 2012. All rights reserved
  • 22. Whyalla Port – Milestones Market announcement – 22 August 2011 First soil turned - 24 January 2012 (5 mnths after announcement) First ore transhipped onto Cape (Hsin May) - 28 December 2012 (11 mths after first soil) First 1 million tonnes through the Inner harbour – 18 May 2013 In July – September 2013 Arrium shipped 3.13m dmt, up 94% on the prior corresponding quarter Copyright Arrium Limited © 2012. All rights reserved