Xstrata Copper North Queensland.pdf - Mount Isa Mines

Our operations and economic performance
Case study
Life of mine extension project
On 3 December 2009, Xstrata Copper announced corporate approval of a $589 million
development to extend the life of Ernest Henry Mining (EHM) through the transformation
of open pit mining operations to a major shaft underground mine with an associated
magnetite extraction plant.
The project will enable EHM to achieve
annual production levels averaging 50,000
tonnes of copper and 70,000 ounces of
gold in concentrates from 2013 once the
underground shaft has been commissioned
until 2024. Ore will be mined principally
from a major hoisting shaft to be sunk
to a depth of 1,000 metres, producing
six million tonnes per annum of ore at full
capacity. EHM will produce approximately
1.2 million tonnes of magnetite concentrate
per annum at full capacity for export to
Asia, making it Queensland’s first iron ore
concentrate exporter.
Copper-gold concentrates from EHM will
continue to be hauled by purpose-built trucks
to Xstrata’s Mount Isa copper smelter, with
the anode then railed to Xstrata Copper’s
refinery in Townsville, while the magnetite
concentrate will be transported by purposebuilt
trucks to a storage and rail load-out
facility near Cloncurry and then railed to
Xstrata’s Port facility at Townsville.
Project works for the shaft underground
mine commenced in January 2010 however
activities were suspended on 3 June 2010
due to the uncertainty created by the Federal
Government’s proposed Resource Super
Profits Tax (RSPT). Despite the suspension,
development works continued for a smaller
decline underground mine that had also been
considered as part of the project feasibility
study. Shaft underground mine activities
resumed on 2 July 2010 in light of the Federal
Government’s decision to replace the RSPT
with a Mineral Resource Rent Tax (MRRT).
Underground development works progressed
during 2010 with a focus on key headings
for access to the base of the shaft and
for ventilation and de-watering systems.
More than 11,000 metres of underground
development was completed during the
year. Works commenced for an escape way
system providing a ladderway to the surface
from underground, and a refrigeration plant
was installed on the surface for improved air
quality. Works for a high voltage reticulation
system also commenced during the year
to provide a new overhead line for the
underground power supply.
Headframe construction is expected to
commence in the first half of 2011 with the
shaft sink beginning in the second half of
2011. The headframe is due to be completed
in the second half of 2012 with the shaft
commissioned in the first half of 2013,
enabling full scale operations from that time.
Steve de Kruijff – Xstrata Copper North
Queensland Chief Operating Officer, said
EHM’s life of mine extension project will play
an important part in sustaining Xstrata’s
north Queensland copper operations that
make a significant contribution to the local
and state economies.
“The project will
generate an additional
330 jobs during
construction and
400 full-time jobs
from 2013.”
“The project will ensure a sustainable future
for our Ernest Henry operations and the
continued supply of copper concentrate to
our smelter in Mount Isa that in turn supports
our refining operations in Townsville,”
said Steve.
“It will generate an additional 330 jobs
during construction and 400 full-time jobs
from 2013.
“In 2010 Xstrata Copper North Queensland
contributed around $1.3 billion to the
Queensland economy.
“This project will help to further strengthen
Queensland’s economy, not only through
ongoing employment, but also since Ernest
Henry Mining will become Queensland’s first
iron ore concentrate exporter,” he said.
Construction of the magnetite plant
commenced in July 2010 and EHM produced
its first magnetite concentrate on 31
December 2010 as part of the commissioning
phase. Commissioning continued in the first
quarter of 2011 with exports scheduled
to commence from Townsville port in the
second quarter of 2011.
Myles Johnston – EHM General Manager,
said the magnetite plant is a major part of
EHM’s life of mine extension project which
will extend the life of the EHM operations to
at least 2024.
“I am pleased to report that the magnetite
base plant has been delivered safely, on time
and within budget, which is a credit to all
those involved,” said Myles.
“The shaft underground mine is on
budget also and we are looking forward to
successfully transitioning from open pit to
underground mining during 2011,” he said.
Clockwise from top: The magnetite extraction plant adjoins the copper-gold concentrator
John Twomey – Magnetite Project Manager, with the first magnetite concentrate produced at EHM
A bulk air cooler was installed to improve air temperature and working conditions in the underground mine
A contractor installs concrete lining for ground support in the underground shaft
Ernest Henry Mining’s underground shaft collar and headframe foundations
Sustainability Report 2010 27