7 May 2019

British court finds BHP “woefully negligent” over 2015 Samarco collapse

A British court has found BHP “woefully negligent” over structural weaknesses of its Fundão dam in Brazil ahead of the facility’s collapse in 2015, which released 55 million cubic metres of iron ore tailings into the local environment and killed 19 people.

In the aftermath of the accident, which was one of the most damaging in Brazilian history, over 200,000 Brazilians, alongside local governments, utility companies, indigenous groups and the Catholic Church, raised a group action lawsuit against BHP, the dam’s co-owner with Vale.

Law firm SPG Law led the suit, suing the company for $5bn in what it calls “the largest claim in UK legal history.” The firm brought the case to Liverpool’s Exchange Chambers in the UK so it can press for a larger settlement from BHP, and as it believes the British court will reach a verdict faster than one in Brazil.

“BHP knew of the risks surrounding the Fundão dam,” said SPG partner Tom Goodhead. “The repeated warnings and recommendations of dam safety experts were acted upon too slowly, or sidestepped entirely.

“Driven by concern for declining revenues amidst the falling market price of iron ore, the company took risks, increased production and turned a blind eye to dangers that ultimately claimed lives and destroyed communities.”

The SPG claim describes a number of failures on BHP’s part, including an awareness of escalating safety concerns regarding the dam’s security and a refusal to act on recommendations made by independent auditors and safety experts. The company is also accused of prioritizing profit over ensuring both human and environmental safety, increasing industrial output despite warnings that the dam’s tailings facilities were incapable of storing increased levels of waste.

“BHP was woefully negligent in its duty of care and the damages sought are entirely commensurate with the devastation the company has wrought upon the people of Minas Gerais, Espirito Santo and Brazil,” said Goodhead.

The suit is the latest legal battle for BHP, which has faced a number of cases recently including a suit filed by its own investors, who wanted to recover losses incurred following collapses in the company’s share price. Not including the SPG case, BHP has faced suits worth more than $50bn in the wake of the disaster.

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7 May 2019

Caterpillar to provide autonomous machinery to Rio Tinto

Caterpillar has signed an agreement to supply Rio Tinto with mining machinery, including autonomous trucks and blast drills, to improve operational safety and performance at the company’s Koodaideri iron ore project in the Pilbara, Western Australia.

The equipment manufacturer, alongside Australian partner WesTrac, will provide 20 autonomous trucks, four autonomous blast drills and a range of loaders, dozers and diggers, as Koodaideri becomes Rio Tinto’s first mine in the region to use Caterpillar technology.

“Technology is rapidly changing our mining operations as we harness innovation to make our operations safer, smarter and more productive,” said Rio Tinto iron ore chief executive Chris Salisbury. “The development and adoption of technology will continue to change the way we work and we remain committed to providing opportunities for new roles, new skills, redeployment and retraining.”

The vehicles are the latest addition to Rio Tinto’s Mine of the Future programme, a project launched in 2008 to take advantage of improvements in technology to improve the effectiveness of mining operations. The company has invested in a number of projects as part of the programme, including the installation of 80 autonomous vehicles at its Pilbara mines and the expansion of its autonomous drilling network to cover more than 5,000km. The Caterpillar machinery will further this scheme.

The machinery will be integrated into Rio Tinto’s mine automation system, which collects data to improve operational performance and safety across the company’s mines. The two firms agreed to consider the potential expansion of autonomous operations at the Koodaideri site, to inform future decisions regarding automation.

Rio Tinto plans to expand its operations in the region, with a new production hub at Koodaideri increasing annual production to 43 million tonnes from 2021. The company is already reporting a 2% increase in exports from the Pilbara in 2018 compared to 2017.

The miner hopes that greater automation will help continue growth, and reduce safety risks by reducing the number of workers who need to be present at sites during mining.

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7 May 2019

Adani’s Carmichael project faces further delays as key approval rejected

The Government of Queensland in Australia has rejected Adani Mining’s plan to protect the population of an endangered bird species in the state.

The Queensland Department of Environment and Science’s decision will delay the company’s controversy-hit Carmichael coal mine project in the state indefinitely.

According to media reports, the department did not approve of the company’s Black-Throated Finch Management Plan, which encompasses initiatives to protect the southern species around the Carmichael coal mine site.

The company now needs to submit a revised plan on finch protection, based on a list of changes provided by the Department of Environment and Science.

Adani Mining CEO Lucas Dow said: “After receiving this advice from the Queensland Environment Department late yesterday, we are now feverishly working through their new requests.

“Although we believe the current version of the Black-Throated Finch Management Plan already meets our project conditions, we are not going to be pig-headed about it and we will review the feedback from the Queensland Department and respond accordingly.”

The Black-Throated Finch Management Plan has been under review by the department for more than 18 months, within which it suggested seven revisions. The latest one will be the eighth round of revision.

Alongside the Black-Throated Finch Management Plan, Adani Mining awaits approval of the Groundwater Dependent Ecosystem Management Plan.

Earlier this month, the company received preliminary approval of its Groundwater Dependent Ecosystem Management Plan, which is now subject to approval from the Queensland government.

Situated in the North Galilee Basin and more than 300km from the Queensland coastline, the Carmichael project has been subject to multiple controversies over its economic viability and environmental impacts.

In its first stage, the mine is expected to produce 27.5 million tonnes of coal per annum.

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3 May 2019

WestStar subsidiary Simpec wins Fortescue Eliwana Mine camp contract

Simpec, the engineering contractor business of Australian industrial conglomerate WestStar, has won a contract from ATCO Structures and Logistics for an 800-room camp at Fortescue Metals’ Eliwana iron ore mine and rail project in the Pilbara region of Western Australia.

Under the contract, Simpec will supply and install the electrical, communications and dry fire systems for the mine camp, located 90km from Tom Price in the Pilbara region.

The $10m contract represents Simpec’s largest single contract award to date. For Simpec, this is the first contract on a Fortescue project. Work will commence in mid-2019.

Simpec will design, supply, construct, test and commission the electrical, communications and dry fire systems of the mine camp. The camp will be delivered over nine months.

The camp will be used in the development project at the new Eliwana Mine.

Currently, the company is working on several projects, including an $8m piping and insulation contract at Kwinana processing plant belonging to Tianqi Lithium, and a $1.7m contract for a flocculant treatment plant and associated works at Cataby mineral sands development owned by Iluka Resources.

The company is also completing camp work at Rio Tinto’s West Angelas project.

The latest contract ensures Simpec’s presence in each of the new iron ore development projects in Western Australia.

The Simpec contract takes the value of contracts won by WestStar during the 2019 financial year so far to $43m.

Simpec managing director Mark Dimasi said: “To see the fruits of the concerted effort during the Fortescue Eliwana tender phase is very rewarding for the team.

“This tier one project award is a significant achievement for SIMPEC allowing the company to construct alongside some of Australia’s biggest construction companies.”

WestStar comprises three operating businesses – Precast Australia (concrete fabrication), Simpec (construction contractor), and Distinct Developments (property developer).

Simpec offers services in structural, mechanical and piping, and electrical and instrumentation works. It provides integrated solutions to deliver infrastructure, energy, mining, and oil and gas projects.

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2 May 2019

Yancoal Australia gets approval for Cameby Downs coal mine expansion

Yancoal Australia has received approval from the Queensland Government for its planned expansion of the Cameby Downs thermal coal mine, located in the Surat Basin, around 360km north-west of Brisbane.

Queensland Mines Minister Anthony Lynham approved mining leases for the expansion project, which will increase production and expand mine life at the open cut site.

The mine has been producing thermal coal for export since mid-2010. The latest approval will allow for an increase in output at the mine from 2.8 million tonnes a year to 3.5 million.

It will also extend the productive life of the mining complex, featuring an open cut thermal coal mine, coal handling and preparation plant, as well as associated infrastructure, to 75 years from 45.

Lynham referred to the extension as a vote of confidence in the state’s resources by Yancoal.

“For Western Downs communities like Miles and Chinchilla, it means greater opportunities for the current and future generations of locals to benefit from a strong resources sector in their region,” Lynham said.

Production ramp-up is anticipated to begin immediately, with peak production expected to be achieved within one year.

The Queensland Resources Council (QRC) stated the extension of the mine life confirms the long-term role for coal in the Surat Basin, with the resources sector accounting for about 10% of the Western Downs Regional Council area’s gross product.

QRC chief executive Ian Macfarlane said: “Whether it is the Government-owned Kogan Creek mine, Cameby Downs, other existing mines in the Surat and Bowen basins or those proposed in the Galilee Basin, Queensland depends upon them. Coal currently delivers $43.4bn or 13% of the state’s gross regional product and more than 215,000 or 9% of full-time equivalent jobs in Queensland.”

The Cameby Downs mine produces a low ash export thermal coal and is linked by rail to the port of Brisbane with port allocation through the Queensland Bulk Handling facility in Brisbane.

Yancoal operates or manages nine coal mines across New South Wales, Queensland and Western Australia, employing nearly 3,000 people and contractors, as well as other service providers.

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