Anglo Australian giant Rio Tinto earns $21bn a year from mining in Western Australia. They took me to visit their vast iron-ore mining operation in the remote Pilbara region, some 1000 km north of Perth. As I lined up at the airport with hundreds of miners in their hi-vis jackets, at 4.30 am, I reflected that it might have been better not to stay up till 1.00am watching Andy Murray at Wimbledon. But it’s been 70 years since the last Brit made it to the final, so I didn’t want to miss it.
We flew over a vast expanse of pale green scrub, stretching away into the distance in every direction, and the pilot pointed out West Angelas mine, a small red gash in the landscape. As we got closer we could see the terraced contours of the open cast mine. But it is only from the ground that you really appreciate the enormous scale of the operation.
I was driven down to the bottom of the mine in a dumper truck the size of a two storey house, with the driver sitting where the upstairs bathroom would be. Then we slowly chugged back up with 200 tons of iron ore on the back. Rio have had to construct everything from scratch in this incredibly remote location: the miners’ accommodation, the power station, the roads, 1400km of railway network connecting the mines to the coast, and the ports to ship out the ore to their Asian customers. This requires vast investments. The company are currently injecting another $15bn over 5 years, to increase output from the region from 225 to 350 million tons a year: that’s a million tons a day. This means a massive expansion of their port at Cape Lambert, where I watched trains 2.5 km long unloading their trucks, before a series of conveyor belts transport the ore out to the waiting ships.
The miners are mostly FIFO, fly-in/fly-out from locations all over Australia. A typical rotation might be a week of days, a week of nights, and a week off. They can earn huge sums for working in such remote, and sometimes adverse conditions – in the summer temperatures can rise into the 40s. There’s a good current film “Red Dog” which gives a flavour of the incredible landscape and the ochre-red dust which seems to cover everything.
You can’t help admiring the ingenuity of man to locate and exploit this remote natural resource, which has helped to fuel the huge expansion of the China’s economic development in recent years, as well as supporting steel production in Japan and Korea. Western Australia provides around half of Australia’s exports and about half of this is iron ore. And the scale of the investment going in to create the necessary infrastructure is truly breathtaking. These assets are going to be producing for decades. As new reserves come on-stream from other countries like Brazil and Guinea, the currently very high world iron ore prices may fall off a bit, but the volume of demand is expected to be maintained for a long time ahead. What an extraordinary industry.