UGL emphasises supply to BHP iron ore

In June 2012, BHP Billiton achieved its twelfth consecutive annual production record in iron ore as shipments rose to an annualised rate of 179 million tonnes.

In Western Australia, the company now has an integrated mine system, two ports and more than 1,000 kilometres of rail for its iron ore operations.

On top of record production figures, BHP recently announced approval of US$7.4 billion of capital investment to continue production growth in the company's iron ore operations in Western Australia. A substantial part of this investment will be used for the development of the company’s Jimblebar mine.

Just east of Newman, Jimblebar will be one of the drivers of BHP’s plans to up its iron ore output to 220 million tonnes a year by 2014, with the mine slated to initially add 35 million tonnes per annum to production and eventually ramp up to 55mtpa.

As a long term provider of mining infrastructure solutions to BHP, UGL says it wants to share in this growth, with the firm emphasising its pit to port capability.

Before the Jimblebar mine development, BHP was focused on the delivery of Rapid Growth Project 5 (RGP5). UGL delivered a $165 million package on the project, which was completed in September 2011. UGL’s work involved construction and installation of structural steel and mechanical equipment associated with transfer stations, conveyors and shuttles in Port Hedland.

Alastair Reid, UGL’s chief operating officer for engineering, projects west stated: “We are very pleased knowing that the infrastructure we helped install as part of the RGP5 project will enable BHP Billiton to fully utilise its inner harbour capacity at Port Hedland and meet greater export targets”.

UGL says it has a long history of supplying BHP and has contributed to many of the major iron ore development and expansion projects in Western Australia since the early 1980s.

For example, in 1988 UGL was involved in the development of BHP’s Ore Body 29 processing plant at Mt Newman. The Ore Body 29 facility produces 5mtpa and is a satellite to the main Mt Whaleback mining operation which is serviced by a separate rail loop.

In addition to the mining infrastructure projects, UGL has delivered locomotives, wagons, signalling equipment and rail maintenance services.

n 2001, BHP hauled the longest train in the world at a length of 7.5kms and over 100,000 tonnes of iron ore using eight GE/UGL AC6000 locomotives, officially certified by the Guinness Book of Records. UGL says it continues to provide maintenance services to these locomotives and forty GE Dash 8 locomotives. UGL has also delivered more than 3,600 iron ore wagons.

Additionally, UGL says that BHP recently handed it a ‘35 years in the Pilbara’ recognition award for providing maintenance services to the miner’s signalling and communication systems on 750 kilometres of track, including the various lines into Port Hedland and minor asset upgrade activities.

In other news, some analysts have reacted badly to UGL’s recent financial results which downplayed the company’s resources and infrastructure prospects following the cancellation of projects by nervous miners. At one stage UGL’s shares fell by 15%.
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