Streamlined, lower cost logistics have allowed Flinders Adelaide Container Terminal and CU River Mining to re-start the mothballed Cairn Hill iron ore mine in South Australia.
When global iron-ore prices plunged in 2014, Termite Resources, owner of Cairn Hill Mine in northern South Australia, went bust and jobs were lost.
The entire supply chain from remote South Australia to the steel mill in China had become uneconomical and the plant and equipment that had connected mine to market was mothballed.
But the buyer, who had supplied the Cairn Hill iron-ore to a Chinese steel mill, saw that there was an opportunity, even though the market had hit rock bottom. By buying the mine in the down cycle, and vertically integrating part of the supply chain, the newly formed CU River Mining identified cost savings that could reactivate the operation and re-cast its economics.
At the same time Flinders Adelaide Container Terminal had taken the strategic decision to roll out a major program of investment. The terminal placed orders for two new ship-to-shore post-panamax cranes, so it would be well-placed when markets rebounded.
In April 2015, CU River purchased the open-pit iron-ore mine at Cairn Hill from the liquidator of the mine’s former owner, Termite Resources, a subsidiary of IMX Resources.
Flinders Adelaide Container Terminal (FACT) worked closely with CU River and other stakeholders to reactivate a viable pit-to-port supply chain. This 800 kilometre-plus journey from pit-to-ship is a crucial element of the entire export supply chain. It’s a supply chain which runs from remote South Australia to the Port of Jingtang in China and onto the local steel mill end-user.
With no deep-water export facility for iron-ore in regional South Australia, CU River and FACT had to carefully plan and identify cost efficiencies to make this supply chain to Port Adelaide sustainable.
Supply chain analysis found that rail remained the most cost effective option for the land-based leg of the journey from Cairn Hill to Port Adelaide. The project could re-use and reactivate existing plant and equipment including the custom-built, open-top containers which Termite / IMX Resources had used to transport and then store the iron-ore at Outer Harbor.
The first shipment from the reactivated mine was loaded out of FACT onto sea transport from 12 to 16 August 2016. There have now been two shipments. 150,000 tonnes of iron-ore have been loaded and a total of 900,000 tonnes planned for the first 12 months.
The return of iron-ore cargo has enabled FACT to hire 18 new employees in operational roles and CU River to engage corporate staff in Adelaide and an operational team in Cairn Hill.
Both CU River and FACT have focussed on economies of scale to drive efficiencies along the supply chain. Flinders has conducted dredging at Outer Harbor Berth 7 to enable vessels which have a maximum draft of 14 metres to berth. These works on the facility’s channel and berth depths have been vital in allowing CU River to bring in larger ships and benefit from economies of scale for the export of their ore.
On the landside, FACT has also invested in creating a two-hectare area of new hard stand for the project’s containers, located behind berth 8. The new hard stand has easy access to the cargo’s export wharf at berth 7 and supports productivity during ship loading operations.
The bulk iron-ore, which is stored in containers at the terminal prior to loading, is transferred into the ship using FACT’s new $24 million ship-to-shore post panamax cranes and a rotating container tippler. The container tippler turns the container by 180 degrees, tipping the iron-ore into the ship’s hold.
To suppress dust for this operation, FACT has taken technology used by one of its subsidiaries and applied new bars, nozzles and pressure gauges so that it is optimised for CU River’s iron-ore product, maximising dust suppression and minimising product loss during ship loading.
Although the new ship-to-shore container cranes were purchased and commissioned as part of the terminal’s long-term investment strategy, they have changed how the terminal handles the iron-ore loading operation.
Previously the terminal only had one post-panamax crane, but now with the arrival of the Liebherr container cranes, the facility has three post-panamax cranes, which can simultaneously accommodate CU River’s iron-ore loading operation and other box ship operations at the terminal.
According to FACT, these new post-Panamax cranes have been driving up productivity and efficiency at the terminal, with ship loading times around 25 per cent faster than before the new cranes were deployed.