Local businesses share $1b in mine construction contracts
Construction of the Western Range iron ore mine in the Pilbara has led to several WA businesses sharing in $1 billion worth of contracts.
Western Range is a joint venture between Rio Tinto (54%) and China Baowu Steel Group (46%). Construction began in the first quarter of the year and will provide about 1,600 construction and 800 ongoing operational jobs.
Production is expected to start in 2025 with annual capacity of 25 million tonnes of iron ore. The development includes construction of a primary crusher and an 18-kilometre conveyor system linking it to Rio Tinto’s existing Paraburdoo processing plant.
WA businesses awards contracts include:
- Civmec: Awarded a contract valued at more than $330 million for the construction of a new Run of Mine (ROM) pad, primary crushing facility, overland conveying circuit, and modifications to the coarse ore stockpile and downstream conveying system.
- CIMIC Group’s CPB Contractors: Awarded a contract valued about $250m to deliver the main infrastructure bulk earthworks.
- Primero Group: Awarded a contracted value of about $54m for the design, supply, construction and commissioning of the Non-Process Infrastructure facilities on site.
- MACA: Awarded a contract valued about $60m to construct a camp pad and access road as well as crushing and screening work.
- Pilbara Aboriginal Businesses: Contracts totalling $39m.
Focus on supporting local
Rio Tinto Iron Ore Chief Executive Simon Trott says the company’s local procurement strategy aims to increase opportunities for Pilbara and WA businesses. Last year, Rio Tinto increased its spend with more than 2,400 WA suppliers to $8.6b.
“Rio Tinto spends billions of dollars with local suppliers across WA and the Pilbara every year, helping support thriving communities across the State by providing local jobs for local people,” says Trott.
“The spending of $1b with Western Australian businesses at Western Range marks a considerable milestone for both the project and those local businesses we are partnering with.”
WA Premier the Hon Roger Cook MLA says major projects such as Western Range help reinforce WA as “an attractive and secure destination for business and investment”.
“[The project] goes to the heart of my Government’s WA Jobs Plan, which is about WA jobs first and its projects like the Western Range that will provide a long pipeline of work for Western Australians into the future,” says Cook.
Partnership extends to decarbonising steel value chain
Rio Tinto and China Baowu’s partnership spans more than 50 years and in June they signed a memorandum of understanding (MoU) to explore a range of industry-leading projects in China and Australia to help decarbonise the steel value chain.
In 2022, Rio Tinto was the world’s second largest producer of iron ore and China Baowu was the leading steel maker.
Projects under the MoU include:
- Research, build and demonstrate a pilot-scale electric melter at one of Baowu’s steel mills in China. This will enable low-carbon steel making utilising direct reduced iron (DRI) that has been produced from low and medium grade ores.
- Optimise pelletisation technology for Australian ores as a feedstock for low-carbon shaft furnace-based direct reduction.
- Expand the development of China Baowu’s HyCROF technology which can largely mitigate CO2 emissions from the blast furnace process.
- Jointly study opportunities for producing low-carbon iron in WA.
To progress each initiative, both companies have agreed to share resources and expertise.
Rio Tinto’s Chief Commercial Officer Alf Barrios says the pair are committed to accelerating the delivery of low-carbon solutions for the entire steel value chain.
“This MoU aims to address one of the biggest challenges faced by the industry – developing a low-carbon pathway for low-to-medium grade iron ores, which account for the vast majority of global iron ore supply,” he says.
“China’s commitment to curbing emissions and promoting high-quality green development is strongly aligned with our own position where climate change and the low-carbon transition are at the heart of our strategy.”