Construction & Operation Highlights

Processing

Much of the past year was spent addressing technical and operational issues identified during commissioning of the first two production lines, improving reliability of production lines and gaining valuable experience along the way.

Design modifications are being made to equipment and systems, including the cyclone feed pump, chute and control system. Preventive maintenance to reduce the likelihood of unscheduled shutdowns has also been a key focus. As a result of these measures, the production line has been operating more smoothly. In 2014, we will continue to fine tune the processing parameters to increase the production rate.

The key issue confronting line two has been the gearless motor. After investigation by the manufacturer Siemens, the motor is being replaced and we are targeting to resume in July 2014.

Construction for lines three to six has begun with key activities including civil construction for lines three and four, and electrical installation of the second stacker. In 2014, civil construction for lines five and six, installation of the two remaining crushers, autogenous grinding mills three and four and two remaining filtering facilities at the dewatering plant will commence. The construction plan for lines three to six is being finalised, but the current expectation is that they will be completed in 2016.

Mining

During the past year, the focus of mining activities shifted from waste movement to ensuring adequate ore supply for the crushers and grinding mills at the concentrator.

We achieved this by configuring our mining fleet and associated equipment to ensure that ore for the current commissioning and production task was delivered in the most efficient manner. The mining team continues to focus on increasing the productivity of the excavators and shovels, and shortening the truck haul route. The maintenance division has focused on improving truck reliability, including the electrical reliability of the drive system.

Reducing total operational cost has been the priority of the mining operation over the past year. By the end of January 2014, approximately 193 million tonnes of waste had been removed, sufficient to allow for the current level of ore mining activity. By lessening the amount of waste movements, savings were achieved through reduced labour requirements and lower vehicle operating costs.

Power station

CITIC Pacific Mining’s award-winning combined cycle power station has provided a reliable power supply for the operation. Production and equipment management and procedures are being completed and updated as further operation information is gathered. The reliability of all seven gas turbines has improved following the ramp-up load test, along with tuning, performance and emission tests.

Plant reliability will further improve once the dynamic load shedding test of the Energy Management System (EMS) is carried out in 2014. Balancing the plant reliability with greater operating efficiencies will be a key focus. A study examining most optimised operation mode under selected scenarios has now been completed.

Synchronisation of all three combined cycles, which produce less carbon emissions than an open cycle plant, was completed during the year. As the first production line ramps up its production and the second line completes its commissioning in 2014, the power plant will have enough load demand to start load testing the combined cycles.

Desalination plant

The desalination plant continues to meet the project’s substantial water requirements, with much of the past year spent optimising plant efficiency.

Initiatives undertaken during this period include upgrading operating and maintenance systems to improve overall reliability. For example, automated data collection was implemented to conduct real-time analysis of plant performance, and alarm code software was upgraded resulting in quicker identification and rectification of potential issues. The replacement programme for several faulty components was also completed.

The plant produces desalinated water by pushing filtered seawater through reverse osmosis membranes. As the desalination process relies heavily on the performance of these membranes, the plant now has an automated membrane cleaning process, reducing the cleaning cycle by 80% and improving plant availability.

Training continues to be an important component in bringing up the standard of operators and the emphasis has been on multi-skilling. Knowledge retention within the team is a top priority.

Port

After securing all necessary approvals to export, on 2 December the first shipment of magnetite concentrate bound for China was loaded onto a ship moored offshore from Cape Preston.

We are now shipping regularly. Up to mid-March 2014, there have been five shipments of around 261,126 wmt of magnetite concentrate. The sixth ship is being loaded at Cape Preston. At this stage, the most efficient shipping method is to barge concentrate to geared vessels anchored offshore. CITIC Pacific’s 12 purpose-built minicape size vessels of 115,000 dwt have been leased out. As concentrate production increases, transshippers and these larger ocean-going vessels will be used in export operations, which will ultimately increase efficiency and help deliver greater economies of scale.

In preparation for first shipment, we spent several months refining procedures and developing operating parameters to manage export activities under a range of prevailing conditions. For example, navigation simulators were used to perfect safe operating maneuvers, assess emergency scenarios and optimise barge fleet turnaround. With the experience that comes with regular shipments, overall port performance is expected to further improve throughout the course of 2014.

Direct shipment from Western Australia to CITIC Pacific Special Steel plant

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