Bis Industries wins Karara tailings contract

 Gindalbie Metals has awarded its Karara project’s tailing management contract to Bis Industries.

The Karara project will use a dry tailings system at the mine, differentiating the tailings management system from conventional tailings dams or evaporation ponds.

By using a dry tailings management system it will allow the project to reduce its water usage by about a third.

The contract, worth approximately $23 million per year, will use a Mobile Stacking System provided by FL Smith, which is designed to handle up to 18.2 million tonnes of tailings annually, or the equivalent tailings from the production of ten million tonnes of magnetite concentrate.

While the system will only run around 14.6 million tonnes per year, it will take on increased throughput at part of Stage 2 of Karara’s expansion.

It is understood that the system will eventually stack the tailings materials up to 95 metres high, in three lifts, over a twenty year period.

Gindalbie managing director Tim Netscher said the mine had incorporated a clarification process into the overall ore beneficiation process to allow for the dewatering of tailings to create waste that is dry.

"The resulting tailings comprise of a dry, inert material composed mainly of silica that will be stockpiled and progressively rehabilitated," Netscher said.

He went on to say that the tailings strategy is part of the miner’s goal to "cement our environmental credentials by delivering significant environmental benefits, including reduced water requirements; improved rehabilitation potential; and reduced disturbance footprint, all while minimising the potential for groundwater contamination".

This latest contract follows the signing of a long term iron ore rail agreement with WestNet Rail, which owns and operates 200 kilometres of narrow gauge rail line from Morawa to Geraldton.

The agreement includes provisions for WestNet to undertake a major $450 million upgrade of its existin rail network to provide capacity for Karara’s stage one production of 10 million tonnes per annum, and its stage two expansion to 16 million tonnes per annum.

According to Gindablie, the second stage can be accommodated through Geraldton without the need for access to Oakajee Port.

The miner also faced uncertainty mid last year after a cost blow out saw the construction costs rise by 30% from 2010, with project slated to cost $2.57 billion.

According to Gindalbie, 70% of the increase is due to materials costs for the Karara concentrator and tender prices for the major construction packages, such as structural, mechanical, piping, electrical and instrumentation for it.

It said that “the underestimation of material quantities has been the result of the Karara’s strategic decision to commence construction in 2009 prior to completion of the detailed design process in order to ensure the project was developed as quickly as possible.”

To cover these costs, Gindalbie may go to its shareholders, after saying that it “will consider equity alternatives that would give shareholders the opportunity to participate on an equitable basis”.

 

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