The Mining Blog

I am sure that you have seen the news about mining companies having to scale back coal production due to infrastructure problems.

Rio Tinto’s Coal & Allied Division announced a 20 percent cut in coal production due to bottlenecks in rail infrastructure and Newcastle Port. As a result, 250 miners will lose their jobs this month.

Other mining companies in the NSW Hunter Valley have also had to scale back production due to these same issues. The Austar mine last month announced that it would cut 79 jobs because it could not get enough port access.

Mining companies have tried to reduce the impact of the port problems by re-introducing a quota system for port access.

A consortium led by BHP Billiton has recently been granted approval to build a third coal export terminal. However, this will not open until 2009.

There has been a lot of people jumping up and down about this issue with the port infrastructure.

However, as an engineer, I understand that infrastructure and equipment has operating capacities. When designing systems to handle coal throughput, you only design the system for the required throughput.

Why?

We know that extra capacity or throughput costs more money. Therefore, predictions are made about requirements and the system is designed to meet those requirements. Any bigger, and it costs more - sometimes a lot more.

Recently, I was in charge of a coal handling system upgrade, and we were faced with the same issue. Many people wanted to know why we didn’t install larger conveyors, etc.

Another issue lies in accuracy of predicting coal output requirements. Some people were saying that the mining boom was going to continue; others were predicting an end.

Lastly, there is the issue of handling peaks in capacity. Sydney’s hospitality industry faced this issue during the 2000 Olympics. What happened after the Games finished? There were a whole lot of vacant motel rooms.

If you have sufficient capacity to handle any possible requirement, most of the time there will be idle capacity. Again, this costs money.

Sometimes, it is hard to make decisions about required capacity, and we are seeing the results of reaching capacity limits with our infrastructure due to the mining boom - just like we did with motels during the Sydney Olympics.

Calvin Close
Managing Director
Australia’s Mining Reference

You may have read about the Western Australian Environmental Protection Authority stopping Rio Tinto from expanding its Pilbarra iron ore project because it failed to protect five species of Troglobite.

Robe River Mining Company, a subsidiary of Rio Tinto, had proposed the $12.5 billion Mesa A project as an expansion of the Pilbarra iron ore project.

The Troglobite is a small invertebrate that is only 4mm long, has no eyes or pigment and lives 5 - 30 metres below ground. It cannot survive above ground.

During its investigation of the Mesa A Project, Robe River discovered 11 of these troglobotic fauna, and committed to setting aside a mining exclusion zone to protect them. However, the EPA said that five of the species live in the area to be mined, and do not occur in the mining exclusion zone.

This news has sent shock waves through the mining industry, with many people raising questions about balancing environmental concerns with the need to foster WA’s biggest ever mining boom.

As expected, Rio Tinto has said that it would appeal the decision.

This is not the first time that the EPA has rejected proposals for mining projects. Recently, they knocked back the Gorgon gas plant on Barrow Island due to the impact on the island’s rare turtle. The WA Environment Minister at the time, Mark McGowan, approved the project with a list of environmental conditions imposed on it.

There are other similar cases.

I do not want to write a long story about this news, because there are many news items that have been published about this already.

Instead, I want to open this up to people to comment about it.

What is your opinion about saving rare species of fauna at the expense of bringing great financial benefits to the WA economy?

Do you think the decision is justified?

Post a comment and let the minng industry know what you think…

Calvin Close
Managing Director
Australia’s Mining Reference