Deep diving into the end of the supply chain

Port Hedland

Port Hedland

The Australian mining sector is largely successful due to its ties to global export markets, something that would not be possible without the help of local mining ports.

Australia might have some of the most prospective supplies of natural resources on Earth – but there’s no hiding from the fact that the country is surrounded by water.

This makes our mining ports vital to the strength of Australia’s economy and the foreign countries, which demand our rich supply of resources.

More than 90 per cent of the world’s exports come from seaborne freight.

Australia’s exports industry has not faltered during the onset of a recession, with the Australian Government’s Resources and Energy Quarterly for June 2020 revealing export numbers are still increasing.

The resource and energy sectors have earned $293 billion in the 2019-20 financial year, a figure fuelled by an increasing demand for iron ore and resilient commodities such as coal.

Regardless of fears that this growth may slow down, the resources industry remains in good stead to continue bolstering the nation’s economy.

Iron ore meets the world

Western Australia makes up more than half of both Australia’s mining exports and mining investment.

With such a large amount of our resources being shipped from the west, Pilbara Ports Authority (PPA) oversees some of the state’s major mining ports, including the Port of Port Hedland, Port of Dampier and the Port of Ashburton.

Established as a Western Australian Government Trading Enterprise in 2014, PPA is an integral part of the country’s resources sector.

“Pilbara Ports Authority plays a key role in the state and national supply chain, facilitating 80 per cent of Australia’s seaborne iron ore exports through the ports of Dampier and Port Hedland,” Pilbara Ports Authority chief executive officer Roger Johnston tells Australian Mining.

“The ports of Dampier and Port Hedland are the world’s largest bulk export ports and are ideally located to meet the increasing demands of imports and exports of rapidly developing economies, particularly in the Asia Pacific region.”

For the 2019-20 financial year, PPA achieved a total annual throughput of 717.2 million tonnes.

Johnston says PPA has also been hard at work to push its ports into the future, along with proposing a number of greenfield ports.

“While efficient, Pilbara Ports Authority has also sought to be innovative, and has invested in world-leading projects and maritime technologies to maximise port efficiency and safety,” Johnston says.

“These have allowed for the management of larger vessels, increasing vessel draft and increasing loaded capacity on vessels, while reducing risk.”

This includes a world-first dynamic port capacity model that increased the shipping capacity at Port Hedland last year.

The Port of Port Hedland represents huge economic value for Western Australia, injecting $54.7 billion into the state’s economy in 2018-19.

“For the Pilbara, it is the gateway to the world,” Port Hedland Industries Council chief executive officer Kirsty Danby tells Australian Mining.

“If the Port Hedland Port Supply Chain was an industry sector in Western Australia, it would outstrip all other sectors apart from mining.

“The Port of Port Hedland has grown to become the world’s largest bulk export terminal, handling over 511 million tonnes of trade and 6147 vessel movements in 2018-19.

“It handles primarily iron ore (99 per cent), but also manganese, salt, lithium and copper concentrate.”

The Pilbara port is a vital economic driver for major iron ore miners such as Fortescue Metals Group, BHP, Roy Hill and Atlas Iron, along with other commodities such as salt from Rio Tinto.

“Australia – in particular the Pilbara – now dominates the world iron ore market, with WA the largest iron ore supplier in the world, accounting for 37 per cent of global supply in 2019,” Danby says.

“The Port of Port Hedland is recognised as one of the most important pieces of economic infrastructure in the nation.”

Shipping Queensland ‘s coal supply

Over the past 10 years, coal has maintained its status as a leading exported resource in Australia.

Queensland is Australia’s largest supplier of coal, with the government-owned Gladstone Ports Corporation (GPC) acting as a lifeblood in the state for coal exports.

“The Port of Gladstone plays an integral part in the supply chain as Australia’s premier multi-commodity port,” Gladstone Ports Corporation acting chief executive officer Craig Walker tells Australian Mining.

GPC manages, develops and operates port facilities across the Central Queensland region, with its ports in Gladstone, Rockhampton and Bundaberg continuing to enhance the region’s prosperity, jobs and trade.

Its priority port, the Port of Gladstone, is Queensland’s largest multi-commodity port and provides throughput of more than 100 million tonnes per annum.

“The Port of Gladstone exports metallurgical coal, which is used for steelmaking, providing the entire contribution of steel to the world,” Walker says.

“Over 70 per cent of the coal exports are metallurgical coal with the remainder being thermal coal, which is used to fuel the boilers of power stations in countries such as Japan, Hong Kong, Taiwan, South Korea and Israel.”

The port is made up of the RG Tanna Coal Terminal (RGTCT) and Wiggins Island Coal Export Terminal (WICET), which makes it the fourth largest coal exporter globally.

“In the 2018-19 financial year, the Port of Gladstone had a total throughput of 124.02 million tonnes – a record number for the port,” Walker says.

“GPC’s unique dual operating model with port and coal terminals broadens its scope and capabilities as a multi commodity port, with imports and exports valued in the vicinity of $40 billion in the 2018-19 financial year.

“RGTCT receives coal from 19 mines within the southern Bowen Basin from two rail supply chains known as the Blackwater and Moura systems.”

Walker says GPC has collaborative and collegiate supply chain arrangements to ensure the efficient and prudent operations and service.

“It is critical that the ports are developed in a systematic and sustainable manner to facilitate the continued growth of trade and planning is a vital part of that process,” he says.

Growing South Australia’s exports opportunities

Flinders Ports is South Australia’s largest port operator, working across seven commercial ports.

“Mining is one of the major industry sectors we work with, reflecting its importance to the state. A significant portion of exports handled through our ports are mined commodities,” Flinders Ports general manager group development Andrew Pellizzari tells Australian Mining.

“Indeed, over the next five years we would also expect this figure to increase with South Australia having set ambitious goals for growth in mining production.”

The private port operator also offers a number of integrated supply chain solutions to the state’s mining companies, which help both smaller and larger companies.

“In addition to port operations, we deliver integrated supply chain solutions to several of the state’s mining companies, including bulk handling, rail to wharf transport and storage,” Pellizzari says.

“It’s this integrated approach that our mining partners find most valuable, enabling them to work with one supply chain partner from mine-to-export.

“An integrated supply chain approach also reduces costs and can allow miners to better plan for, and mitigate, any knock-on effects of volatile commodities markets in their supply chain processes.”

For Pellizzari, advancements in technology have also contributed to its operation, applying a datacentric approach to its container allocation and management at its Flinders Adelaide Container Terminal.

“Our group leadership team also continually assesses new technology solutions and our 50-year masterplan, which will be completed this year, will also look at the long-term potential of a range of technologies, ranging from AI, automation and blockchain,” he says.

“As a group Flinders Port Holdings has already invested significant capital expenditure over the past 15 years to expand and improve our port facilities to accommodate export growth and will continue to invest to ensure South Australia remains connected to the world.

“The state has set ambitious targets for international exports of energy and mining commodities starting at $8 billion in 2025 and $13 billion by 2030. Flinders Port Holdings is committed to ensuring the state infrastructure can support this level of export growth.”

This article also appears in the August edition of Australian Mining.

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