Inside the Making of Roy Hill
The long awaited Roy Hill project in the Pilbara region of Western Australia is finally coming to fruition. Representing the next era in iron ore mining, the $10 billion project is expected to unlock a treasure trove of iron ore—55 million tons per year—through an integrated mine, rail and port operation, while providing significant economic and social benefits in the process. The Roy Hill operation is scheduled to load its first shipment of iron ore for export later this year.
The inner workings
The goal for Roy Hill is to develop a vertically integrated pit-to-port business strategy utilizing a mine, rail and port system to efficiently mine, transport and export iron ore.
Roy Hill’s independently owned and operated railway is a 344km standard gauge, single line, heavy haul railway built to transport 55 million tons of iron ore from the Roy Hill Mine to the dedicated Port stockyard facility, in the Boodarie Industrial Estate south of Port Hedland.
“Five ore trains per day will operate from the Roy Hill Mine, each consisting of two diesel electric locomotives hauling 232 ore cars with a total payload of 31,132 tons of ore,” said Roy Hill CEO, Barry Fitzgerald.
“Due to the undulating nature of the terrain to the north of the mine, for the first 30 kilometres of the journey to Port Hedland, each train will initially be assisted by rear located, manned banker locomotives.”
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The train system will include a wide array of state-of-the-art technology, including a communications-based automatic train protection system that will provide improved safety for all track related activities and increased operational efficiencies.
“The adoption of this full vehicle tracking communication based technology is the first of its kind to be used in Australia and will set new benchmarks for iron ore railways in the Pilbara,” said Fitzgerald.
After transportation via rail, Roy Hill will then export shipments through its world-class iron ore port facility at Port Hedland. The facility is capable of receiving, stockpiling, screening and exporting 55 million tons of iron ore, including the capacity to store more than 2.3 million tons.
The company will be controlling all of this through its Remote Operational Centre (ROC) in Perth.
“The amalgamation of these business functions into a truly vertically integrated business provides a coordinated and integrated approach to the planning, operation and overall management of our corporate, mining, processing, rail and port operations,” said Fitzgerald.
“The co-location of the corporate headquarters and ROC provides us with the ability to seamlessly integrate the operations, marketing and corporate services functions from end to end.”
The ROC will consist of a demand chain team that is responsible for the operational planning, scheduling and execution of production, maintenance and supply activities across all areas of operations. Their focus will be collecting and validating data, reporting it in real-time to be used in operational decision making.
“The ROC drives productivity and continuous improvement across the business, by focusing on how the individual functions of the business —operations, marketing and corporate—operate together most effectively as a whole,” said Fitzgerald.
“This approach ensures that the business is maximizing throughput and quality conformance, as well as managing variation to effectively minimize operating costs.”
Along with developing the next generation of mining operations, Roy Hill intends on developing the next generation of employees.
“We want to be a knowledge-based organization with a focus on innovative thinking that helps drive productivity and business improvements, so that we continue to deliver what we say we will deliver,” said Fitzgerald.
“We are creating an organization that is free of bureaucracy, where efficiency through streamlined processes drives high performance and delivers cost effective, fit for purpose outcomes.”
The company aims to cultivate a work environment that is conducive to creativity and collaboration, where people actively contribute and realize their full potential.
“We want to cultivate a great work environment for our employees—a place where people are engaged and committed to achieving success. We want to be an organization where people feel proud about what they’ve done and about working for Roy Hill.”
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To ensure employees are properly trained and updated on new safety precautions, the company implements a wide range of training programs for new and old employees, as well as unique initiatives to help them get acclimated with the company.
“We implement a range of training for our people starting with the induction training when they first join to introduce them to the vision, and values of the company and the behaviours we expect from our people. We run regular safety and operational capability and accreditation training and all staff attend a cultural awareness training program that is run in collaboration with the three traditional owner groups whose country the project operates in – the Nyiparrli, Palyku and Kariyarra people.”
Leaving a legacy
Another reason for the significance of the Roy Hill project is the immense economic and social benefits it brings to Australia.
Construction of the massive project, including railway and port facilities, has created around 5,600 jobs at its peak, and ongoing operations will require 2,000 workers. The project has generated more than 39,000 direct and indirect jobs, including 600 people currently working directly for Roy Hill, which will increase to more than 2,000 when the project reaches full production.
Another unique aspect of the Roy Hill project is their approach to reducing their environmental footprint. According to Fitzgerald, Roy Hill already has plans in place for rehabilitation and mine reclamation for the project.
“The nature of the Roy Hill deposit means we will be mining from multiple shallow pits, this allows us to progressively backfill mined pits using the overburden waste material being removed as a result of mining from each pit. These mined out pits will then be rehabilitated using previously removed original topsoil, which facilitates better growth of indigenous flora. There is a twofold benefit to this rehabilitation method, it considerably reduces waste removal costs through shorter haul distances, but also once mining has been completed, we will have returned the landscape to its natural state leaving very little evidence of mining activities.”
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Roy Hill also plans to go the extra mile in terms of corporate social responsibility. In accordance with its values, the company is actively seeking to go beyond just the Roy Hill Project to leave a lasting legacy in the communities in which it operates.
“Our plan for leaving a positive legacy in the communities in which we operate is unique to the approach from others in the industry,” said Fitzgerald. “We have established the Roy Hill Community Foundation, a charitable trust established to focus on delivering education, training and employment, community development, business development and culture and arts programs to these communities.”
Fitzgerald concludes, “The difference with the Roy Hill Community Foundation is that we have invited our contractors, business partners and suppliers working on the project to join us in leaving a lasting legacy in the Pilbara, by making monetary or in kind donations to the foundation. We believe that by working in partnership, we can make a significant difference by maximizing opportunities and addressing community issues that companies may not have the resources or expertise to tackle on their own. We have also introduced a high level of governance with our Foundation partner Samsung C&T and our platinum sponsors, Downer EDI, National Australia Bank and Hitachi having a direct influence on the programs the Roy Hill Community Foundation will implement.”
British Lithium Pressured Due To Calls for Electric Cars
The British demand for lithium is set to reach 75,000 tonnes by 2035 as the government works towards their ban on the sale of high-polluting diesel and petrol vehicles within the UK. This comes as automakers worldwide continue to insist on the benefits electric vehicles will have on slowing the rate of climate change.
It is estimated that the UK will require 50,000-60,000 MT of lithium carbonate a year by 2035 for battery production to satisfy government needs. This is assuming production remains at 1.2 million vehicles per year, and the amount of lithium required does not increase.
British Lithium, which hopes to begin constructing a quarry to produce 20,000 MT of lithium carbonate a year in a $400 million investment, are not without competitors, both within the UK and abroad.
Competition For Lithium Rises In Europe
After only five years after its initial launch, Cornish Lithium is setting its sights on becoming a UK powerhouse in mining lithium, aiming to begin commercial production in under four years. Jeremy Wrathall, a former investment banker and current managing director of Cornish Lithium, had the future in mind when founding the company.
“In 2016, I started to think about the electric vehicle revolution and what that would mean for metal demand, and I started to think about lithium,” he said in an interview with AFP. “A friend of mine mentioned lithium being identified in Cornwall, and I just wondered if that was a sort of unrecognised thing in the UK.”
Lithium was first discovered in Cornwall around 1864 and has not been mined again since 1914 when it was produced as an ingredient in fireworks. Now, however, Cornish Lithium is reportedly in the testing stage to see if the metal can be produced commercially to meet the growing demand required for the electric car sector.
Despite Cornwall’s close historic ties to mining lithium, Wrathall insists that the project is purely commercial.
Cornish Mining Revival For Lithium Production
“It’s not a mission that drives me to the point of being emotional or romantic,” he says. “It’s vitally important that we do get this technology otherwise Europe has got no lithium supply.”
The European Commission has also stated their goal to end the sale of new petrol and diesel cars by 2035 to aid the environment. That being said, the majority of lithium extraction currently relies on power provided by environmentally damaging fossil fuels─a slight contradiction.
Alex Keynes, from the Brussels-based lobby group Transport & Environment, is adamant that mining for lithium should be done sustainably.
“Our view is that medium-to-long term, the majority of materials including lithium should come from efficient and clean recycling.
“Europe from a strategic point of view should be looking at securing its own supply of lithium.”
Despite growing competition from abroad, British Lithium Chairman, Roderick Smith, continues to place importance on the mining of lithium within the UK.
“Imagine what the UK economy would look like if we lost our automotive industry,” Smith says. “The stakes are high for the UK.”
Smith expects the UK to compete with other European countries to secure a lithium battery plant in the near future.