Rio Tinto has committed $150 million to a partnership with WA manufacturer Gemco Rail to bring local iron ore rail car manufacturing and bearing maintenance to the Pilbara.
The State Government will also commit $6.9m from its $15m Local Manufacturing Investment Fund (LMIF) to upgrade Gemco Rail’s Forrestfield facility and build a new Karratha hub.
Gemco Rail will deliver 100 wagons – 40 initially, and another 10 per year over the next six years – as well as repairing and refurbishing key wagon componentry.
The first WA-built rail car is expected to be delivered in 2024 and the Karratha-based facility should be built by the end of 2024, subject to finding a suitable property.
The new facility will reduce the need to transport iron ore cars and bearings between the Pilbara and Perth, removing about 150 truck journeys from WA roads and 300 tonnes of carbon dioxide each year.
A new industry
The alliance is expected create new jobs, increase spend with local and Indigenous businesses and support local economic growth, says Rio Tinto Iron Ore Chief Executive Simon Trott.
“This will bring a new industry to the Pilbara,” Trott says.
“We aim to create enduring partnerships that generate positive impacts in the regions where we operate and are proud to be leading the way in bringing iron ore car manufacturing and maintenance to the Pilbara.
“We’ve taken our original scope to build iron ore cars in WA and enhanced it to see the construction of ore cars in the same region as our operations.”
Supporting local manufacturing
WA Premier Roger Cook says the government is committed to “rebuilding” WA’s local manufacturing capability. The LMIF, part of the WA Jobs Plan, helps existing businesses build iron ore wagons locally.
“Not only will the agreement create jobs and diversify the economy, it will help revitalise and future-proof local manufacturing in WA, including in the Pilbara,” he says.
Engenco, the parent company of Gemco Rail, Chief Executive Officer Dean Draper says the company is looking forward to utilising its manufacturing experience and capabilities. The Rio deal comes six months after Gemco won a contract with rail operator Arc Infrastructure to build 20 specialised rail wagons at Forrestfield.
“Gemco Rail’s investment in the Pilbara reflects our long-term commitment to customers and communities in WA,” he says.
“We acknowledge the conscious efforts of Rio Tinto to increase their spend with WA-based suppliers, our supply partner QRRS [Qiqihar Railway Rolling Stock], and the support of the WA Government in facilitating this investment in Karratha.”
Chinese train manufacturer CRRC’S QRRS representative Zhu Yifeng says the company is looking forward to supporting “this important project to contribute to local society and communities”.
“We will commit to promote partnership with Rio Tinto and supply excellent products and services continuously,” he says.
BHP on track
Last October, BHP committed to building 140 iron ore cars over four years in Perth.
It’s already taken delivery of 20 rail cars, assembled locally by contractor UGL.
As with Rio Tinto, the iron ore car components are shipped from QRRS’s factory in China as ‘flat packs’. They are then assembled, welded and commissioned in Perth before being delivered to the Pilbara operations.
Want to keep up to-date with the latest business news and advice? Become a CCIWA Member today and get access to exclusive information designed to help you do business better. Find out more here.