BHP’S US$3.6 billion South Flank project is expected to replace the Yandi mine as it reaches the end of its economic life in the early to mid-2020s.
The project would provide sufficient feed to sustain the current level of iron ore production from the company’s Pilbara mines, and with an 80mtpa output by 2021, it will be the single largest annual production iron ore mine that BHP has even developed.
BHP South Flank project manager Simon Thomas said South Flank would provide an increase in BHP’s West Australian Iron Ore (WAIO) operations average iron ore grade, and subsequently result in higher-quality lump and fines products.
“South Flank will allow us to increase the quality of our products, satisfying rising demand of high-grade fines and lump with the structural improvement of steel margins and more stringent environmental standards,” Mr Thomas said.
“The shift towards increased demand for higher quality materials positions the South Flank product to be in high demand by our customers.”
The South Flank deposit is 26km long, 2km wide and requires significant mining infrastructure and operations, including two main mining areas, each supported by a 40mtpa crusher.
“There’s about 23km of overland conveyors,” Mr Thomas said.
“Plus there are the usual conveyors, coarse ore stockpile, product screening buildings, a new train load-out facility and rail loop duplication.
“The Mining Area C stockyard is to be expanded and our new stockyard machines shall be among the largest in the world.”
Future-proofing
The project is expected to produce ore for more than 25 years. BHP has a future-proofing strategy in place with autonomous operations, smart modules and digital connectivity through its Remote Operations Centre.
In an address to shareholders in April, BHP chief executive officer Andrew Mackenzie said that BHP’s automation and technological advancement was the way to remain competitive.
“We will unlock the next wave of productivity through technology and transformation,” he said.
“Like all global companies, BHP faces unprecedented challenges as the pace and quantum of technological change push us all towards new frontiers.
“We live in a world where technology continues to disrupt every aspect of the way we live and work.
“To remain competitive, we must be ready to adapt and hungry to seize the opportunity before us.”
Mr Mackenzie said that to stay ahead of technological disruption, BHP must reshape its workforces, streamline processes and redesign the way it works.
“That is why we established a dedicated Transformation Office to strengthen safety, generate greater value and competitive returns well into the future,” he said.
“This work consolidates and integrates our transformation programs focused on workforce capability, job design and technology that we plan to implement over the next five years. “We established Integrated Remote Operated Centres, as well as autonomous blast-hole drills, and the phased roll-out of autonomous trucks will also make us safer and our operations more predictable.”
The company even has an innovation mine at the Eastern Ridge iron ore operation in WA which tests new solutions and innovations in geology, extraction and processes.
“It develops workforce capability so that our people are equipped for the rapid pace of change that lies ahead. Successful trials are quickly replicated across other operations,” Mr Mackenzie said.
Mr Thomas echoed this sentiment for the South Flank project.
“Technology is changing the way the mining industry operates,” he said.
“We see South Flank as an opportunity to build on our strategic investment in technology to drive further improvements across our mining value chain, and as we move to highly automated operations across the Pilbara, we have an opportunity to more fully integrate our supply chain from resource to market.”
Mr Thomas said the company aims to build on its success and drive automation further back, into its drill and blast and load and haul operations, to bring the safety and productivity benefits it’s seen across its fixed plant operations.
“Our Integrated Remote Operations Centre in Perth has given us the foundation to introduce more flexibility into how we plan and schedule, enabling us to better meet the needs of our customers,” he said.
“We see South Flank as an opportunity to advance our efforts to become a fully integrated and highly automated business by 2025.”
Local contracts
South Flank is expected to create about 10,000 jobs over its 25-year life span, opening up significant employment opportunities for future generations locally and across the State.
“We expect about 85 per cent of the South Flank spend will be awarded to Australian companies, of which 90 per cent is likely to be completed in WA,” he said.
“Already we have awarded contracts worth A$2 billion for WA-based work.”
Pilbara-based businesses will have the opportunity to benefit from the project, with contractors expected to subcontract to local suppliers, and BHP pushing initiatives like its Local Buying Program to make it easier for smaller businesses to participate.
Mr Thomas said that BHP has a long history in WA and had established strong connections with, and support for, the local communities in the areas where it operates.
“We are proud of the contribution we have made and continue to make to the WA economy – the jobs we have created in regional communities and across the State, the opportunities and support we offer WA suppliers and contractors, as well as our contribution to health, education and community services,” he said.
“We embrace our responsibility to support local job opportunities and the participation of Pilbara residential labour in the South Flank project.
“We expect this of our contractors too, requiring them to supply detailed methodology for providing maximum employment opportunities for Pilbara residents.”
To ensure the jobs created in the Pilbara would be sustainable for decades, BHP committed to introduce more apprenticeships and traineeships, and to invest in education to employment pathways by partnering with local schools to improve the quality of education and vocational training.
“This will provide an opportunity to employ, train and support trainees, as well as simultaneously allow them to undertake practical work experience hosted by our construction contractors,” Mr Thomas said.
The iron ore market provided a platform of sustained opportunity for the company and the main challenges would be to ensure both staff and processes are prepared to cope and adapt over time.
“We need to be thinking about how we support future generations through significant investments and sustained production,” Mr Thomas said.
“South Flank is that sustaining opportunity for BHP.”
