COMMENT

New projects to support growth in Australian iron ore production in 2022

Over the next five years, Australian iron ore production is expected to grow at a CAGR of 2.6% to reach 1.04 billion tonnes in 2026.

Australia’s iron ore production is set to increase by 2% to 941 million tonnes (Mt) in 2022, backed by projects that began operations in 2021, such as South Flank, West Angelas, Mesas B, C and D and Western Turner Syncline Phase 2. The upper end of the iron ore production expectations from Rio Tinto and BHP equates to 594Mt in 2022, 16.8% higher than the 508.4Mt produced in 2021.

However, continuing labour shortages, alongside slowing demand from China due to environmental pledges and new Covid-related lockdowns and restrictions during Q1 2022, is scaring the global iron ore industry yet again.

// Main image:St Agnes, UK - 2018: Visitors of the Wheel Coates tin mine site, wearing hard hats and listening to one of the local guides. Credit: AmbrosiniV / Shutterstock.com

Steady growth

Overall, Australia produced 922.6Mt of iron ore in 2021, accounting for nearly 40% of the global total with a marginal increase of 0.5% over 2020.

Over the next five years to 2026, Australian iron ore production is expected to grow at a CAGR of 2.6% to reach 1.04 billion tonnes in 2026. This growth will be helped by the commencement of new projects and the expansion of the existing ones such as South Flank, which began in 2021 and is gradually expected to ramp up to its full capacity of 80Mt, replacing output from the Yandi mine, which is nearing the end of mine life (2023).

Projects with the potential to commence operations during the forecast period include FMG’s Iron Bridge, which is progressing on schedule and budget, with the first shipment of concentrate expected to be in December 2022. Simultaneously, construction activities at the Gudai-Darri project continue with operations expected to begin by mid-2022.

Supply chain delays, maintenance, weather disruptions and labour shortages due to Covid-19-related border restrictions were the key factors behind Australia’s restrained growth. However, the commencement of FMG’s Eliwana mine and ramp-up at BHP’s South Flank, partially offset the impact.

Rio Tinto’s iron ore production at Australian operations declined from 271.9Mt in 2020 to 263Mt in 2021, a 3.3% fall. Labour shortages, as well as commissioning delays, were key factors in the decline in production. In Q1 2022, the company’s production declined by 15% quarter-on-quarter (QOQ) due to increased on-site Covid-19 cases in the Pilbara, after the opening of Western Australia’s borders.

Meanwhile, planned maintenance activities, alongside a continued shortage of train drivers, hit BHP’s output, with a 10% QOQ decline. Last year, despite weather-related disruptions and rail labour shortage, BHP’s Australian supply increased, albeit by a marginal 0.1%, to 245.4Mt.

This was driven by record production at Jimblebar and Mining Area C, which included first ore from South Flank in May 2021.

Steel and beyond

Global steel production increased by 3.8% in 2021, helped by a strong post-pandemic economic recovery. However, steel production in China, which produces around half of the global steel and is also the largest market for Australian iron ore, fell by 3%.

Emissions-related production cuts, particularly during the second half of 2021, alongside sluggish domestic demand, impacted China’s output, with construction output growth in China slowing to just 2.1% in 2021, owing to a tightening of regulatory controls to limit borrowing by real estate developers. Overall, this was completely offset by growth in the US (18%), India (17.9%) and Japan (15.8%), which collectively produced 44.2Mt more steel in 2021 versus 2020.

Looking ahead, improvement in global demand is expected in 2022, helped by a marginally higher growth in construction output.

There remain uncertainties, however, in the short-term outlook, following Russia’s invasion of Ukraine. The war will exacerbate existing supply chain disruptions and put even greater upward pressure on energy prices, which will further drive up prices for key construction materials. Meanwhile, there are also still prevailing risks associated with the pandemic, particularly in markets with a “zero-Covid” policy, such as China.

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02/17/2024 11:55:09

COMMENT

AR can address the health and safety concerns facing the mining industry

AR is a key building block for digitalisation and is particularly useful in ensuring safety, as it enables the immersive training of mineworkers while bypassing the unnecessary risks of on-the-job training.

As mining companies continue to address the environmental, social and corporate governance concerns of their industry, environmental issues often take centre stage. The impacts of mining on climate change, pollution, biodiversity and natural resources are wide-reaching and well-publicised. However, it is essential to attend to the social and governance aspects of the industry too, namely the health and safety of mineworkers.

Even with the recent decline in mining-related death and injury rates, the mining industry remains extremely dangerous, with risks posed by poisonous gases, extreme heat, cave-ins or machine breakdown, to name a few. Mining companies must take responsibility for ensuring worker safety on-site and only further operational and technological improvements can reduce major risks.

Many mine sites have set safety as a high priority and use measurements such as total recordable injury frequency and lost time injury frequency rates to benchmark their performance against industry standards and measure their progress over time.

This is where augmented reality (AR) can come in and help companies reach the highest safety standards and limit injuries on site. AR describes technology that allows users to see the real world overlaid with data, and has potential for use in the mining industry in particular.

Several companies, including Anglo American, Glencore, Rio Tinto and Hindalco Industries, already employ AR-based training. Anglo American, for example, spent $90m (A$127m) on training in 2019, which included the launch of a “LEARN+” platform that included AR learning experiences to train staff.

Another successful use of AR-based training was seen in 2020 by JFE Steel, with the installation of a mixed reality training simulator at its West Japan Works site in the Fukuyama District.

The training combined the trainee’s movements with a mixed reality factory floor to create a new environment where physical and virtual elements worked together. Importantly, it provided workers with hands-on training without the real-world risks; for example, when learning to work with high-temperature molten materials.

Also in 2020, Vale partnered with Norcat to develop more blended learning programmes for the mining industry to train and upskill mineworkers. Norcat is a Canadian not-for-profit technology and innovation centre that sees virtual and AR learning programmes as the future of training in the mining sector.

AR, in particular, provides immersive training, acts as a go-between for on- and off-site staff, and provides visual guidance in critical scenarios to mineworkers without shutting them off from the real world.

Mining companies should continue to experiment and use AR-based training in their move towards zero on-site fatalities and injuries, while simultaneously cutting down training times and upskilling workers in an industry with an ageing labour pool.

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02/17/2024 17:09:34

COMMENT

Miners continue to expand use of battery-powered vehicles underground

As of March 2022, GlobalData was tracking 157 electric loaders and 45 electric trucks operating in underground mines worldwide.

As miners strive to reduce greenhouse gas emissions, many, particularly those with underground mines, are beginning to invest in battery-powered and electric-powered mining fleets.

As of March 2022, GlobalData was tracking 157 electric loaders (LHDs) and 45 electric trucks operating in underground mines across the globe, with the largest combined population of electric LHDs and trucks in Canada (76), followed by Russia (52), Sweden (35) and Australia (14). This total of 202 compares with a total of 182 in June 2021.

By company, Agnico Eagle Mines Limited – the new company formed from the merger of Kirkland Lake Gold and Agnico Eagle – has the largest combined number of LHDs and trucks in operation with 49, including 27 battery or electric-powered LHDs and 17 battery-powered underground mining trucks at its Macassa mine in Canada.

It is followed by Luossavaara-Kiirunavaara AB with 34 and ARMZ Uranium Holding Co and Vale with 20 each. The main suppliers are Sandvik, including Artisan, and Epiroc, with a combined share of over 70% of the machines in use.

Not only does the use of battery power and electric power reduce greenhouse gases, but it also significantly reduces ventilation costs, with 40%-50% less ventilation required with battery or electric-powered machines compared to those running on diesel. There are also lower cooling requirements, less noise pollution and lower maintenance costs, with battery vehicles having 25% or so fewer parts compared with diesel propulsion systems.

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02/17/2024 20:47:36