THE Karara iron ore project has confirmed the high local content that can be achieved on major resources developments, with more than 90 per cent of total spending awarded to Australian suppliers.
The $3 billion project, to be officially opened next week, made a particular effort to include suppliers based in the Mid West.
It awarded contracts worth $308 million to 340 suppliers in towns such as Geraldton, Perenjori, Morawa and Kalbarri.
A joint venture between Perth company Gindalbie Metals and China’s Ansteel, Karara is the first large-scale iron ore project to be developed in the Mid West.
It is also the first magnetite project to go into production in Western Australia, in contrast to the Pilbara mines that extract hematite ore.
Of the $3.03 billion spent on construction and development, 91.5 per cent was awarded to Australian suppliers.
By comparison, other iron ore expansion projects typically have local content in the mid to high 80 per cent range, while liquefied natural gas (LNG) construction projects have only about 50 per cent local content.
Karara Mining chief executive Steve Murdoch said the company was extremely proud of its achievements in the Mid West.
“As a large business in the area, we have a lot of responsibility,” Mr Murdoch told WA Business News.
Mr Murdoch said Karara made a special effort to help small businesses, which would not normally qualify for work on mining projects.
For instance, during 2010 when local farmers were hit hard by drought conditions, Karara engaged 19 farmers as owner-drivers to undertake haulage work.
Mr Murdoch believes the project will have a lasting impact on nearby small towns, such as Perenjori and Morawa, where local mechanics have been contracted to service mine-site vehicles.
Mr Murdoch said the project had also encouraged businesses such as Coates Hire, Novus Glass and Mine Trades & Maintenance to establish branches in local towns, providing a further boost.
The project included a major upgrade of port facilities at Geraldton, which now has a dedicated 16 million tonnes per annum facility for the Karara operation.
Mr Murdoch said this work was undertaken by local contractors such as GCo Electrical, Diab Engineering, Maicon Engineering and Wearside, and employed about 200 contractors.
The largest contractor on the Karara project was Sydney-based Downer, which has won a series of power, electrical and mining contracts.
Other big winners included Perth-based contractors NRW Holdings, which undertook earthworks and civil contracts, and Ausgroup subsidiary AGC Industries.
Looking beyond the construction phase, Karara has also unveiled a number of training and development initiatives.
It has partnered with the Durack Institute of Technology to provide training for more than 30 port employees in resource processing, with a specific focus on ship-loading, mooring and associated bulk handling processes.
Mr Murdoch said Karara has been able to add value to its internal training by aligning all of its onsite port training and inductions with nationally recognised competencies, enabling staff to be more employable for future careers.
Karara has also sponsored biodiesel production from waste vegetable oil and free-range egg production from a mobile ‘chicken caravan’.
The initiatives were developed by Karara Mining staff in response to an internal competition to come up with ways to reduce the project’s environmental footprint and improve its operations.
They are being developed at the Geoff Wedlock Innovation Park, located on a local farm bought by Karara and named after the late former chairman of Gindalbie Metals.
