The Pilbara’s $9 billion iron ore construction boom is gathering steam with BHP announcing the long-awaited approval for its South Flank mine.
BHP South Flank has been listing potential project packages on the ICN Gateway site since 2017. With the go ahead of the project, the next phase of packages being listed on Gateway will be the sub-contractor packages of the successful main contractors.
Mike Henry, BHP’s President of Minerals Australia, says the US$3.4 billion ($4.5b) project will replace production from the 80 million tonnes per annum Yandi mine which is reaching the end of its economic life.
‘The project will create around 2,500 construction jobs, more than 600 ongoing operational roles and generate many opportunities for WA suppliers,’ he says.
‘It will enhance the average quality of BHP’s WA Iron Ore (WAIO) production and will allow us to benefit from price premiums for higher-quality lump and fines products.’
South Flank will expand the existing infrastructure at Mining Area C, and involve construction of an 80Mtpa crushing and screening plant, overland conveyor system, stockyard and train loading facilities, procurement of new mining fleet and substantial mine development and pre-strip work.
First ore is targeted in 2021, with the project expected to produce ore for more than 25 years.
South Flank’s iron ore will contribute to an increase in WAIO’s average iron grade from 61 per cent to 62 per cent, BHP says, and the overall proportion of lump from 25 per cent to 35 per cent.
The green light comes a year after BHP approved an initial funding commitment of US$184 million, primarily for the expansion of accommodation facilities.
WA Works revealed earlier this month that BHP will use South Flank to test a new management approach aimed at streamlining its interaction with contractors.
Matt Furrer, BHP Vice President Minerals Australia projects, said engineering for South Flank was being delivered by Jacobs and Fluor Corporation from their Perth offices.
But BHP would not appoint an engineering, procurement, construction management (EPCM) contractor to oversee sub-contractors and suppliers.
Rather, South Flank would be run under a new, simplified model to improve access for contractors and suppliers managed by an integrated project team (IPT).
‘This approach will allow BHP to more directly collaborate with companies on project delivery,’ Furrer said.
South Flank’s approval comes just weeks after Fortescue Metals sanctioned its $1.7b (US$1.275b) Eliwana development, expected to create as many as 1,900 jobs during construction and 500 full-time site positions once operational.
Rio Tinto, meanwhile, aims to begin construction next year for its $2.7b Koodaideri project, creating a further 1600 jobs.