Surface Excavators at Fortescue: Production with Precision
Australia’s third largest iron ore miner is expanding its fleet of surface excavation machines as part of an $8.4-billion program to triple production by mid-2013
By Russell A. Carter, Managing Editor

Fortescue Metals Group’s Christmas Creek mine, shown here, is currently producing 35 million mt/y of iron ore and is ramping up to reach
40 million mt/y. Expansion proj-ects will boost overall production from FMG’s Chichester Hub, which includes Christmas Creek and the
Cloudbreak mine, to 95 million mt/y by the end of 2012.
The scope of iron ore mining and shipping operations across Western Australia’s Pilbara region is so vast it defies easy comprehension, looming larger than any other recent regional mining boom in a global industry that specializes in “big”— as in big mines, huge equipment and ambitious plans.

The numbers speak for themselves: Australia’s Bureau of Resources and Energy Economics (BREE) announced in June that iron ore shipments from Pilbara producers totaled 463 million mt last year, and predicted that the figure would rise during the next fiscal year to 510 million mt. W.A. government statistics also show that investment funding for the 15 iron ore projects that are now in advanced stages of development across the region total $25.6 billion.

Rio Tinto, the second largest global producer of iron ore after Brazil’s Vale, is mining its Pilbara ore at a rate of 230 mil-lion mt/y, and aims to boost future pro-duction in stages, initially to 283 million mt/y and ultimately to 353 million mt/y by the first half of 2015.

Rio Tinto, which has earmarked $4.2 billion for this expansion—of which the lion’s share will go toward port and rail facility enhancements—is currently wait-ing on approvals from its joint venture partners and the W.A. government to move forward on mine production-capaci-ty increases to support these expansion plans.

Rio Tinto’s closest competitor in this market, BHP Billiton, also has revealed plans to expand its Pilbara iron ore pro-duction, first by spending $7.4 billion to raise output from the current 155 million mt/y to 225 million mt/y by 2014, then to 350 million mt/y possibly by 2020—and eventually to 450 million mt/y, although it provided no specific target date for achiev-ing that rate.

Aggressive competition is the norm in the Pilbara iron ore market, and no compa-ny has pursued that strategy more res-olutely than Fortescue Metals Group, the third largest producer, which had no phys-ical presence in the region before its incep-tion in 2003 but has since grown into a major player, holding 2.2 billion mt of hematite ore reserves, almost 12 billion mt of ore resources and currently in the midst an expansion strategy that will almost triple its annual production to 155 million mt by mid-2013. FMG’s stated production target for 2012 is 55 million mt.

The billions budgeted by the top three producers will ensure that there’ll be no near-term dropoff in mining activity around the Pilbara, but recent softening in the iron ore market, combined with more attention being paid by the mega-miners to their shareholders’ satisfaction versus unfettered expansion spending, plus the prospect of heightened competition in the China/India markets from Vale, appears to have somewhat tempered the Pilbara Big Three’s more ambitious investment plans. In early June, for exam-ple, FMG’s CEO Nev Power announced the company was reassessing its intent to boost production capacity to 250 million mt/y by 2015, and instead may carry out a series of “bolt on” production increases of 20 million to 50 million mt/y during that time frame.

Its competitors, Rio Tinto and BHP Billiton, also have been sending mixed sig-nals lately regarding their long-term invest-ment plans. BHP Billiton’s Chairman Jac Nasser, speaking at the Australian Institute of Company Directors in May, said the min-ing industry currently “has more projects than cash flows” and that the “investment horizon has changed,” and if BHP Billiton couldn’t meet its criteria in any one proj-ect, it would redirect capital somewhere else or not invest at all. Rio Tinto CEO Tom Albanese reportedly issued a companywide memo on July 2 announcing a 10% cut in support and services costs going forward after incurring a 30% rise in those expens-es last year, with Australia being one of its higher-cost areas of operation.

However, the heads of both Rio Tinto’s and BHP Billiton’s iron ore operations— Sam Walsh and Ian Ashby, respectively— have publicly maintained that their com-pany’s plans for investment in Pilbara operations will remain largely unchanged. Interestingly, Billiton’s Ashby unexpected-ly announced his resignation in March after his informal comments regarding a perceived flattening of Chinese demand for iron ore caused a slump in the com-pany’s stock price.

Vermeer’s T1655 Terrain Leveler surface excavation machine weighs more
than 400,000 lb (181,500 kg) and is powered by two Caterpillar C18 diesel
engines. Fortescue has ordered seven for its Christmas Creek mine.

Rapid Rise in Revenues
FMG, as a fledgling company that emerged from the acquisition of Allied Mining & Processing by Metal Group Pty. Ltd. in 2003, gained its first mining tenements at Christmas Creek in the same year, as well as initial tenements at Cloudbreak. Four years later in October 2007, it began min-ing at Cloudbreak; in April 2008 it com-pleted the Cloudbreak to Port Hedland rail-way and loaded its initial shipment of iron ore on a ship at its Herb Elliott port in May. Today, it holds 85,000 km2 of mining ten-ements in the Pilbara and reported annual revenues of some $5.5 billion.

FMG’s mining and processing opera-tions are currently centered in its Chichester Hub, the easternmost of three regional areas of activity in the Pilbara, where the Cloudbreak and Christmas Creek mines are located. A new, 60-million-mt/y mine at the Solomon hub, 120 km to the west of Chichester, is expected to begin production in late 2012, and FMG is actively drilling its Western Hub properties, where it already has found 625 million mt of resource-grade ore that eventually may supply a new port facility contemplated by the company at Anketell Point, W.A.

In addition, FMG’s most recent dis-covery, Nyidinghu, is less than 35 km from the Chichester Hub and, according to the company, contains at least 2 bil-lion mt of high-grade, Brockman-type hematite ore resources. The company is evaluating early production from Nyidinghu and is looking at a full-scale project as its next development step.

Although its long-term production hori-zon may not be crystal clear at the moment, FMG definitely has a tight focus on near-term goals as it moves into the final year of its “T155” program to bring output up to 155 million mt/y.

The Cloudbreak mine currently extracts and processes ore at a rate of 40 million mt/y. Earlier this year, FMG received gov-ernment approval to proceed with an expansion at Cloudbreak that will include the development of new pits, waste dumps, and an upgrade of the ore process-ing facility (OPF), leading to an increase in ore production to 50 million mt/y.

The nearby, newer Christmas Creek mine is currently producing 35 million mt/y and is ramping up to reach an expanded rate of 40 million mt/y by the end of 2012. Construction of a second OPF at Christmas Creek is under way, and according to FMG, synergies will be achieved at Cloudbreak/Christmas Creek through the sharing of stockyards and the train loader along with brownfield expan-sion of water and power facilities.

Overall, expansions will take the installed capacity of the Chichester Hub to 90 million mt/y by the end of this year, while an additional 5 million mt/y will be shipped through Christmas Creek from the Fortescue/BC Iron Nullagine Joint Venture.

FMG said it expected to receive approval from the W.A. Department of Mines and Petroleum to begin full-scale mining at Solomon by the end of June 2012. First ore through the new 20-mil-lion-mt/y Firetail OPF at Solomon is target-ed for December 2012, followed by start-up of the 40-million-mt/y Kings OPF in March 2013.

Leaning on Technology
All of the major Pilbara producers are leaning heavily on technology to ease the costs, time and manpower resources required to operate large, complex min-ing and processing facilities in remote locations. For example, Rio Tinto recent-ly moved five autonomous Komatsu haul trucks from its West Angelas mine— where they had been hauling waste on driverless routes in a test program—to its Yandicoogina mine, where they’ll be assigned to hauling and dumping iron ore, along with five other new autonomous Komatsu trucks. Rio Tinto plans to add another 150 Komatsu autonomous haulers to its Pilbara opera-tions over the next four years. It will also spend about $442 million to automate trains on its extensive rail lines.

The T1655’s cutter drum can excavate a swath 144 in. (365 cm) wide, to a
maximum depth of 27 in. (69 cm). The drum’s cutter bits are positioned on a
4-in. spacing pattern that allows each bit’s cutting area to overlap with
others for a uniform excavated surface. The large rectangular tanks above
the drum hold water for dust control.

Even BHP Billiton, generally regarded as less willing to spend money on leading-edge technology—preferring to rely, instead, on proven products—is looking at integration of Caterpillar autonomous trucks at some of its mines and will open an integrated remote operations center in Perth, similar to one already established by Rio Tinto, that will coordinate near-term scheduling, planning and controlling of its Pilbara –based operations from a central location.

FMG also has not been reticent about adopting new technology and, in fact, will soon commission a large fleet of autonomous Cat haulers at its newest mines. Recent events illustrate that, when the company’s managers and engineers are convinced that a new technology, or a new model of production equipment, can help FMG meet its production objectives, they don’t necessarily wait until the end of pro-totype testing before placing an order. That was the case in 2011, for example when Vermeer, an Iowa, USA-based manufactur-er of Terrain Leveler surface excavation machines (SEMs), demonstrated its newest model, the T1655.

FMG has used surface mining machines extensively in both the Cloudbreak and Christmas Creek opera-tions; in fact, Cloudbreak’s mine layout was planned from the start as a surface-excavation type operation because of the deposit’s long, shallow shape and corre-sponding economic need for selective mining. Conditions at Christmas Creek are similar, and several pits at the newer mine are exclusively surface-excavator sites, variously employing both Vermeer and Wirtgen machines.

The mine’s Vermeer fleet comprised nine T1255 SEMs in 2011—at the time, Vermeer’s largest machine. But it was eventually matched against Wirtgen’s new 4200 SM, a much larger machine that, during testing on site in 2009, achieved cutting rates twice that of even its smaller sibling, Wirtgen’s 2500 SM. FMG quickly ordered additional 4200 SMs—10 of which would go into service at Christmas Creek—and Vermeer faced the possibility of losing future orders.

Delayed Development
Vermeer had begun development of a larg-er SEM in 2007 but chose to slow the pace of the project during the global economic recession of 2008-2009. That lull in development, said Mark Cooper, Vermeer’s senior director of specialty excavation, actually gave the company an opportunity to review and revamp some important design elements before moving ahead with prototype design. Among the major deci-sions to be made on machine concept was whether to make it a cut-and-leave, or cut-and-load type unit to match its competi-tor’s approach.

Vermeer decided the cut-and-load approach, in which the machine transfers excavated material via an onboard convey-or to pacing haul trucks, involved too many variable factors that could affect production rates—such as changes in cut-ting speed and the number of available haul trucks, for example—and chose instead to design the T1655 to leave cut material in place for subsequent loading and haulage by other equipment. To assist prospective customers in choosing the cor-rect approach, Vermeer has developed a “rock lab” program to evaluate and pro-vide detailed input on the most efficient cutting and loading method for site condi-tions, according to Cooper.

With an upturn in economic activity, Vermeer proceeded with construction of an $8-million facility upgrade, exclusively dedicated to production of the first and subsequent T1655s. A prototype machine was completed in May 2011 and was promptly shipped to Australia, where it was reassembled and transported to Christmas Creek in September. After only about 1,000 hours of field testing in a production environment, FMG placed an order for seven T1655s in October, including the one already on site. At the time of E&MJ’svisit to the Vermeer and FMG facilities in Western Australia in early June, the second T1655 was at Vermeer’s Perth facility awaiting ship-ment, and five were being built at the company’s plant in Pella, Iowa, where production is targeted at producing a fin-ished machine every 60 days.

New Drum Beats Old Design
At 200 tons (181.4 mt), the T1655 is twice the size and weight of its predeces-sor, the T1255. It measures 17 ft (5.2 m) high from ground to the top of the cab at full extension, 44 ft (13.4 m) long and 21 ft (6.4 m) wide. It also differs sig-nificantly from the T1255 in that the cutting drum is now direct-driven instead of chain-driven. Having the drive motors attached directly to the cutter drum not only improves cutter drum efficiency, but also reduces wear costs associated with chain, sprocket or belt transmissions, explained Vermeer Engineering Manager Jeff Flahive. The drum is mounted at the rear of the machine, allowing it to cut material while the tracks remain on uncut ground. This, and the machine’s low center of gravity, provides ample traction and keeps the T1655 balanced and stable. The cutter drum has a patented tilt feature that allows it to tilt 5° in either direction to produce a smooth excavated area.

During testing of the prototype at Christmas Creek mine, the improvement in machine productivity due to its size, power and cutting efficiency quickly became evident: the T1655 proved capa-ble of cutting 2,500 mt/h of hematite ore, compared with the T1255’s maximum rate of about 600 mt/h.

A microprocessor-based control
system prevents oper-ators from
making crucial operating mistakes,
according to Vermeer, and the
T1655's TEC Plus display, shown
here, provides constant information
on machine functions as well as
diagnostic capabilities.

The T1655 has dual hydrostatic tracks for independent rotation in either direc-tion. A load control feature allows the machine to automatically adjust ground speed to use full engine horsepower, thus making the machine more productive. This provides a stable ground drive speed for maximum productivity in varying condi-tions. The cutting drum can excavate a swath 144 in. wide to a maximum depth of 27 in., at a rate of 5 to 8 ft/minute, leav-ing behind a strip of uniform 6–8 in. frag-ments when the depth of cut is set cor-rectly for prevailing conditions.

The T1655 features two Cat C18 ACERT engines providing a total of 1,200 hp (895 kW). Both engines trans-fer power to a common pump drive; under normal conditions each engine provides power equally to the machine, but if one becomes disabled, the machine can still function on a single engine. An 800-gal (3,028-l) fuel tank provides more than 13 hours of continu-ous operation at maximum horsepower.

As the latest member of Vermeer’s Terrain Leveler SEM product line, the T1655 also features a new TEC Plus dis-play that allows and monitors communica-tions among various control modules installed throughout the machine. The TEC Plus display allows the operator to monitor and control machine functions and improves the onboard diagnostic capabili-ties. The machine’s microprocessor-based control system prevents the operator from making crucial operating mistakes, accord-ing to the company.

Vermeer also included cab enhance-ments, including a filtered air system, dual heating/cooling systems, sound attenuating foam and dual full-suspen-sion seats. In operation, the cab rises to a maximum height of 17 ft and also shifts outward 23 in. (58 cm) for enhanced vis-ibility. The cab, isolated from the main machine structure by pneumatic cush-ions, meets ROPS standards.

Chasing Iron
At both Cloudbreak and Christmas Creek, the flat tabular nature of the orebodies makes mining by traditional drill and blast techniques difficult due to the risk of increasing silica levels from mixing of ore and waste. Although the overburden is blasted, loaded and hauled away by con-ventional methods, the precision cutting capabilities of the surface excavation machines, offering the ability to “chase” meandering ore layers, makes them a high-ly effective tool for achieving the mines’ production targets.

At Christmas Creek, five pits are cur-rently active, extracting a specific daily vol-ume of ore that allows FMG to meet prod-uct specifications. Once the orebody has been stripped, exposing perhaps 60% or more of the ore, the SEMs go to work, cut-ting at a depth (~400 mm) that has been determined to provide the best combina-tion of cutting speed and uniform frag-mentation without excessive fines. The ability to tilt the drum to adjust for ground irregularities, along with the adjustable depth of cut, allows the SEMs to quickly produce a smooth, uniform pit floor that can minimize wear and tear on pit equip-ment, especially rubber-tired machines, and can also allow the use of offroad trucks in place of conventional mine haulers in many cases.

The strip, or flitch, of excavated materi-al is left in place behind the SEMs, sam-pled and then pushed into larger piles by a fleet of D10T Cat dozers, later to be loaded by Cat 992 or 994 wheel loaders into rigid-body trucks or multi-trailer road trains for transport to the OPF

. To meet the mine’s stated goal of loading five and a half unit trains every day, the pace of production is intense: during a 24-hour period in April, Christmas Creek’s fleet hauled 649,000 mt of material. Also in April, the mine’s OPF1 produced almost 79,000 tons of processed ore in a 24-hour period, and the train loadout facility loaded 127,300 tons in a day.

FMG anticipated delivery of 15.8 mil-lion mt of ore during the quarter ending in June.

Although FMG’s newest surface mine at the Solomon Hub will use conventional mining equipment, Vermeer is optimistic its newest SEM will play an important role in helping the company meet the T155 tar-get—and even more ambitious future objectives that could extend FMG’s iron ore production platform to 355 million mt/y. With two-way communications and GPS guidance on the drawing board as a future performance feature for the machine, Vermeer’s Scott Cooper sees positive prospects for the SEM’s capabilities. “An engineer could create a mine plan in the office and send the data to the SEM. The operator can pull the plan up on the screen and go to work based on the new mine plan in front of him.

“That’s the future of precision mining,” said Cooper. “Efficiently capturing more value out of the mine.”

As featured in Womp 2012 Vol 07 -