DESPITE record rainfall at two of its three mine sites last year, Rio Tinto subsidiary Dampier Salt has beaten the odds, reporting record rates of production, sales and exports for 2011.
Dampier Salt managing director Denise Goldsworthy said the company exported more than 10 million tonnes of solar salt in 2011, just a year after it was honoured as one of the state’s most successful exporters at the WA Industry and Export Awards.
Meanwhile, the company has moved forward with its plan to refurbish its long-standing Dampier Ship Loading Jetty. Savcor Group, through its subsidiary Savcor Finn, was awarded the $12.8 million project, which involves the removal of an existing
timber decking system, refurbishment and painting of a steel superstructure, and installation of a new precast concrete decking system.
A joint venture between Rio Tinto (68 per cent), Marubeni Corporation (22 per cent) and Sojitz (10 per cent), Dampier Salt has solar salt operations at Dampier, Lake MacLeod and Port Hedland, all in WA. Its maiden operation, the Dampier mine,
was established in 1967, and is currently the largest of the three sites with a total operating area of more than 10,000 hectares and a production capacity of 4.2 million tonnes per annum.
In 1978, the Lake MacLeod gypsum operation north of Carnarvon was acquired and, with a current production capacity of 2.9mtpa, it has the greatest potential for expansion.
In 2001, Dampier Salt acquired Cargill Australia’s 3mpta salt operation at Port Hedland for $185.37 million, boosting the company’s overall 5mtpa production capacity at the time.
The most abundant source of salt is the ocean, which is estimated to contain about 50 quadrillion tonnes of dissolved salt solids. This amount of salt would cover the Earth’s land surface to a depth of 152.4m: about the height of a 40-storey building.
Dampier Salt’s approach to salt production involves extracting seawater at its Dampier and Port Hedland operations, and naturally-occurring underground brine at Lake MacLeod, and using the evaporative power of the sun and wind to produce a salt (sodium chloride) concentrate. The total area under evaporation at Dampier Salt’s three sites is 19,500ha, the equivalent of about 27,900 soccer fields. Sun and wind energy comprise 99 per cent of the total energy required to grow, process and ship the salt.
At the Dampier and Port Hedland operations, the salt is produced by natural evaporation of seawater. Seawater is pumped into the sites and flows through a series of ponds to become a concentrated brine. Once the brine is saturated with salt, it is pumped into crystallisers where further evaporation causes the pure sodium chloride to crystallise as a solid deposit. The remaining brine – which is called bitterns – is returned to the ocean.
The salt is collected about once a year when a harvester scrapes the salt from the top of the deposit. The salt is then washed to remove impurities and stockpiled for shipment.
At Lake MacLeod, the brine comes from a natural salt-rich aquifer that lies below the surface of the lake. The processes for crystallisation, harvesting, washing, stockpiling and ship loading used at Lake MacLeod are the same as those employed at the Dampier and Port Hedland operations. It takes about 60mt of seawater to produce 1mt of salt and about 18 months to move the seawater through the series of ponds to grow the salt, ready for harvesting.
“It’s a natural process, and an environmentally- friendly process but it’s one that we can’t control because so much of it is weather related,” Ms Goldsworthy said. The hot, dry climate of WA’s northwest is ideal for solar salt production, but the region is prone to flooding in the wet season. In 2011, Lake MacLeod was battered by intense rainfall and cyclone Carlos – affecting production for two months – while the Dampier operation experienced record rainfall. Despite this, the company recorded
its highest rates of production. Ms Goldsworthy attributed this success to the company’s three-site operating strategy and well-executed stock management policy.
The operations are spread across a 900km area, which reduces the probability of rain impacting all three operations at one time. In addition, the company holds a combination of dry product and solid stock in crystallisers at all operations, to ensure supply reliability.
“By having three sites, on any one day one of them is operating somewhere, one of them is not flooded, one is not in a cyclone…it does spread our risk around the weather impact on our salt production,” she said. “The other bit is we have a core policy
maintaining a certain level of stocks, and while they have been significantly reduced this year because we have produced at probably nearly half our normal salt capacity, we have been able to rely on that stocks policy to be able to keep our customers happy.” As the world’s biggest exporter of solar salt, the company has customers in Asia, Europe, Africa, the Middle East and North America. Ms Goldsworthy said the majority of recent market growth had been in China, which was now the second largest importer of solar salt in the world, behind Japan. According to a report by internationallyrecognised market research company Merchant Research and Consulting in May 2011, the global demand for salt was set to rise by 3.3 per cent per year between 2011 and 2015. While ongoing troubles in the European Union and the US have made some customers cautious, Ms Goldsworthy said this wariness had been balanced on the demand side by some shortages in the supply side.
“Not only have we been hit by bad weather this year (2011), but our competitor in Australia have been bit by bad weather, the monsoons in India were heavy and late, and Indonesia and China have had very large rainfalls as well, so the salt supply market is relatively tight at this point,” she said. “So while demand has come off a bit, supply has come off a bit as well, so things are slower but prices are quite reasonable: they’re not quite as high as the peak just before the Global Financial Crisis but they’re not far off it.”
The majority of salt Dampier Salt produces is used by the chemical industry to produce caustic soda, soda ash and chlorine. The chemicals are then used in the processing and manufacturing of other products for the automotive, construction and electronic industries. A small percentage is used in food processing.
The demand for industrial salt is relatively steady and predictable, there being a direct correlation between the growth of the wider economy and the growth of the chemicals industry. In the next few years, the company plans to expand the Lake MacLeod operation and increase the company’s total production to 15mt. “We are looking at expansion at our Lake MacLeod operations to support the growth in China, but with the uncertainty generally in the economic environment, and the impact on our margins as a result of the highly-volatile Australian dollar exchange rate, we are looking at what we can do to improve productivity and what we can do with incremental expansion,” Ms Goldsworthy said.
By Kate Christou