XZI 399_Memorandum August 2012_web - McArthur River Mining

Osprey get a new homeWhat do you do when largesea birds take up residence onimportant equipment? Buildthem a new home.That’s what has happened at the Bing Bong LoadingFacility, where a friendly feathered couple kept buildingtheir nest on the loading boom of the MV Aburri barge.The site is the bird’s natural nesting ground, but thebirds seemed unperturbed by the industrial actionaround them.Keen to preserve their home, environmental staffrecommended a safer nesting place. A raised platformnow sits close to the loading boom. It took three monthsfor the couple to get used to their new home, but sincethen they have had a number of broods of chicks.After each brood they destroy the nest and startagain next time.There are plans to erect additional platforms in thearea in the future.Osprey have found a safe new home at Bing Bong.Long-term energy supply securedA 20-year electricity supply agreementhas been secured with EnergyDevelopments Ltd (ENE) to extendpower supply arrangements to MRMuntil 2033.The new contract will comprise theprovision of 68 megawatts (MW)of power supply and include theconstruction of a new 53MW gas firedpower station and partial use of ENE’sexisting 24MW power station at themine. ENE has been the sole powersupply to the mine since its openingin 1995.The new contract will take effect inJanuary 2014, with the power stationto be fuelled by natural gas suppliedby Xstrata from the Daly Waters toMcArthur River natural gas pipeline.It provides for the average of 40MWof capacity required by the MRMoperations currently subject to a majorexpansion, which will more than doubleproduction capacity, as well as peakload conditions.ENE Managing Director Greg Pritchardsaid: “We are delighted to be expandingour longstanding relationship withXstrata to meet the future needs ofthis world-class mine.”“The expansion confirms ENE’s positionas Australia’s largest independentremote power supplier operating in the1 to 100 MW market, with 32 projectsand installed capacity in excess of320MW on completion of this project,”Mr Pritchard said.Wärtsilä, a leading global supplier offlexible and efficient power plantsolutions, has been contracted to supplythe equipment for the new power plant.Wärtsilä’s scope of supply includessix Wärtsilä 34SG engines runningon natural gas and the relatedengineering services. Deliveryis scheduled to be completed byearly 2013, and the power plantis expected to be fully operationalby the end of 2013.The Wärtsilä 34SG is a four-stroke,spark-ignited gas engine that worksaccording to the Otto process andthe lean-burn principle. The efficiencyof the Wärtsilä 34SG is the highest ofany spark-ignited gas engine currentlyavailable. The gas fuelled, lean-burn,medium-speed engine is a reliable,highly efficient and flexible powersource for baseload, intermediate,peaking, and cogeneration plants.The high efficiency of the engine isbased on state-of-the-art technology.

Rainbow leads to MRM asXstrata approves Phase 3Xstrata plc has approved, subjectto final Northern Territory governmentapproval, a $360 million investment tomore than double capacity at McArthurRiver Mine (MRM) from 2.5 milliontonnes of ore to 5.5 million tonnesper annum from 2014.The MRM Phase 3 DevelopmentProject will increase annual zincproduction to 380,000 tonnes andlead production to 93,000 tonnes.Advanced processing technology onsite will enable MRM for the first timeto produce a separate zinc concentrateacceptable to all smelters from its bulkzinc-lead concentrate.The project will reduce average unitcosts by over 20 per cent, reserveswill increase by over 100 per cent toabout 115 million tonnes, making MRMthe largest zinc resource in the world.The mine life will extend to 2038 andthe project will deliver robust returnsat conservative price assumptions.Following approvals, the Phase 3Development will commission in 2013and reach full production in 2014.Xstrata plc Executive Director andXstrata Zinc Chief Executive SantiagoZaldumbide said the highly capital andenergy efficient brownfield growthexpansion will secure MRM’s positionas one of the world’s premier zinc mines.Mr Zaldumbide said: “When weacquired the McArthur River Mine in2003 as part of our Mount Isa Minesacquisition, Xstrata inherited anuneconomic asset with an estimatedmine life of less than five years, risingcosts and an underground operationthat could only exploit two of theeight available ore bodies. Followingour conversion of the operation intoa 2.5mtpa open cut mine with a15 year life in 2010 to open up accessto MRM’s vast resource, the Phase 3project will enable us to unlock fullyits potential.“The next phase of McArthurRiver’s development will completeour transformation of a failing andunprofitable operation nine years agointo a world class, low cost, large scaleand long life open cut mine. We expectnew production to flow into the marketat a time of projected deficit in theglobal zinc concentrate market andMRM will be well positioned to meetdemands from both our own smeltersand external customers.”Xstrata Zinc Australia Chief OperatingOfficer, Brian Hearne said: “The Ministerfor Natural Resources, Environment andHeritage has sanctioned that the Phase3 expansion can commence, subjectto a normal set of recommendations.We now await the relevant approvalsfrom the Minister for Resources priorto starting construction on the projectthis year and commencing mining atthe increased rate in January 2014.We are standing by our commitmentto invest 75% of the capital expenditureand 100% of operational expenditurefor the Project with Northern Territorysuppliers and industry”.“We expect the MRM Phase 3Development Project to generate a67% increase in jobs on site to 735positions by 2020, sustain a high levelof Indigenous workforce participation(currently 23%) and boost industryoutput by $8.4 billion within theNorthern Territory economy and$9.3 billion nationally over the lifeof mine.” The Project proposes:• expanding the current pit withinthe existing bund from a footprintof 145 hectares to 210 hectares,and the depth from 210 metres to420 metres• extending the life of our MRMCommunity Benefits Trust which since2007 has invested in grant programsvalued at over $7 million to supportthe socio-economic development ofthe region• increasing the capacity of the existingtailings storage facility and lining theexisting Cell 3 and proposed Cell4 with a High Density Polyethylenebarrier to prevent potential seepage• generating approximately530 million tonnes of additionalwaste rock to be accommodatedin one existing and two newoverburden emplacement facilities• building a temporary constructioncamp and upgrading existinginfrastructure facilities.

Students get a tasteof engineering lifeSix students from Darwin High School got a taste of life at MRMin May as part of their studies in engineering.The students spent a day and night at MRM looking overoperations and talking to workers on site. They are allstudying at Darwin High’s Centre for Excellence in Scienceand Mathematics, specialising in engineering.Student Miranda Crowley said the experience had helpedher decide on her future career options.“This trip was an amazing opportunity, allowing us to viewthe large open cut pit, the rechanneled river that is uniqueto the McArthur River Mine, as well as speaking with themining staff who were able to recount personal experiencesand give advice on future study options,” she said.“This experience set in concrete my interest in the miningindustry, and I was informed about the degree that I nowwish to complete, which is mining engineering.”MRM employees show the valueof literacy and numeracy skillsMRM is helping to demonstrate the importance ofliteracy and numeracy in the workplace by participatingin a series of online learning modules being producedby the Department of Education and Training.The Online Vocation Education team is producingthe modules using video and experiences from actualworkplaces in seven industries, including mining.The modules track young people working in thoseindustries and feature videos of them using skills inthe workplace.MRM employees Rocky Cubillo, Clayton Andersonand Michayla Holt participated in the video projectwhen Department of Education and Training officersJoanne Forrest and Christine Sheoch came on site tosupervise the filming.The resources will focus on age and industry-appropriateliteracy and numeracy activities to build capacity inthe Northern Territory’s 20 Growth Towns, of whichBorroloola is one.Michayla Holt explains for the camera how she uses numeracyskills in her work as an environmental trainee technician at MRM.

Special Projects Manager Sam Strohmayr oversaw constructionand commissioning of the HMP.MRM’s Dwayne Holt is working at the fullyoperational HMP.Heavy Medium Plantnow operationalMRM’s new Heavy Medium Plant is now fully operationaland in the final commissioning stages following thehandover in August.The plant separates ore from waste rock usinggravity, reducing both power and reagentconsumption in the concentrator.It also improves the quality of the materials beingfed to the concentrator with the zinc grade beingincreased by about 2% on the mined grade.Construction of the plant has been underwaysince November last year, with a large numberof the contracts being delivered by Borroloolaand Northern Territory-based businesses.Pre-assembled modules were trucked almost1,000km from Darwin to site.The new facility was chosen over an upgradeto the existing concentrator due to the heavymedium plant’s better construction time,lower electricity requirements and improvedmetallurgical performance.MRM Metallurgy Manager Vince Garner said theplant had performed well during commissioning,taking crushed rock and refining it before it is sentfor grinding.Thirteen additional staff have been employedto operate and maintain the plant.

Local Yanyuwalanguage featuresat the OlympicsThe local Borroloola Yanyuwalanguage was on the world stageat the London Olympics thanks toa unique partnership supported byMRM’s Community Benefits Trust.International artist Shellie Morris came back to her rootsto work with the Borroloola songwomen to produce theSong Peoples Sessions – a celebration of culture andtraditional languages.The Song Peoples Sessions CDs were launched in frontof a strong crowd in Borroloola on 28 June.There it was announced that Shellie would sing one ofthe songs from the CD in Yanyuwa language at the LondonCultural Olympiad, a festival held in conjunction with theOlympic Games.Shellie’s connections to Borroloola reach back to whenher grandmother was taken from her community at ayoung age. While Shellie grew up elsewhere, she hassince reconnected with her family, culture and language.In 2011, the Song Peoples Sessions invited Shellie Morristo collaborate with her Yanyuwa family and women fromthe Gurdanji, Mara and Garawa language groups tocompose new songs, entirely in languages of the region.The result is the double album Ngambala Wiji li-Wunungu– Together We Are Strong.“Language will keep our culture strong and of all themusical work I’ve ever done, I’m most proud of this,”Shellie said.Speaking at the launch, MRM Health, Safety, Environmentand Community Manager Gary Taylor said the MRMCommunity Benefits Trust had joined others in supportingthe project because of its cultural significance.“Some of the projects supported by the Trust are abouteconomic development, some are about providing brighterfutures for our kids and others are about enriching our livesthrough art and culture,” he said.MRM Manager Health, Safety, Environment andCommunity Gary Taylor congratulates Shellie Morrisand the singers at the launch in Borroloola on 28 June.Shellie Morris belts out a song to an appreciative crowd.