BHP takes over final Pilbara mine

BHP Billiton has notified Macmahon Holdings that it plans to take over the Orebody 18 iron ore mine this year, while also announcing its intention to close one of its smaller Pilbara mines.

The Orebody 18 move will complete the transition of all BHP’s Pilbara mines to an owner-operator model.

Macmahon signalled in its interim results announcement earlier this month that its Orebody 18 contract was likely to finish later in 2014.

BHP said the transition would be completed by the end of the financial year.

The change will affect about 200 Macmahon employees out of the company’s total workforce of 2,885 people.

The company said the majority of these employees would be given the opportunity to relocate to other Macmahon projects.

BHP started moving towards a 100 per cent owner-operator model in 2011, when it acquired HWE Mining, following a series of mine site deaths.

The Yarrie mine moved to owner-operator in the middle of 2013, following expiry of a five-year, $388 million contract held by indigenous contractor Ngarda Civil & Mining.

That was the largest contract ever awarded to an indigenous contractor in Western Australia.

BHP said today that its Yarrie operation, at which it suspended mining in December, would remain closed until further notice “as an additional productivity measure”.

The company has about 160 staff at Yarrie, with half of these to be redeployed to its recently opened Jimblebar operation, which will manage Orebody 18.

The balance would be offered positions in other areas of the business wherever possible, the company said.

BHP’s president iron ore Jimmy Wilson said excess trucks and shovels made available due to improved productivity at other mining operations would be used at Orebody 18, resulting in no additional truck and shovel purchases being required.

Macmahon has run Orebody 18 since 2007, earning total revenue of $975 million since then.