A BULK LOGISTICS SOLUTION FOR OK TEDI MINING LIMITED (OTML) IN PAPUA NEW GUINEA

Transcription

1 A BULK LOGISTICS SOLUTION FOR OK TEDI MINING LIMITED (OTML) IN PAPUA NEW GUINEA

2 THE CUSTOMER A BULK LOGISTICS SOLUTION FOR OK TEDI MINING LIMITED (OTML) IN PAPUA NEW GUINEA The Ok Tedi mine, owned and operated by OTML, is a major producer of copper concentrate situated in the Star Mountains of PNG s remote Western Province. OTML is the single largest contributor to the PNG economy accounting for 32% of export earnings and 22.9% of GDP in 2007 alone 1. BACKGROUND The area is cut off from the outside world by its remote location with the only form of connection being the Fly River, the second longest river in PNG. Kiunga is the most Northern navigable point on the Fly River (950km upstream from the Gulf of Papua). The Ok Tedi mine is directly connected to the river port of Kiunga (approx. 157km away) by the purpose built Kiunga-Tabubil highway the only all weather road in the province. The copper concentrate ore is processed by an onsite mill at the Ok Tedi mine into slurry which is transported to Kiunga, through a pipeline running parallel to the highway, where the concentrate is filtered, dried and stockpiled ready to be loaded onto barges for onward transportation. THE LOGISTICAL CHALLENGE BHP Billiton Ltd. (BHP), who majority owned the mine until 2002 when they transferred their shares to the PNG Sustainable Development Program Ltd., had to overcome the logistical challenge of moving approximately 670,000 tonnes per annum of dried copper concentrate, with traces of gold and silver, from the processing plant in Kiunga to a site suitable for loading Handymax and Panamax export vessels. The China Navigation Co. Ltd. (CNCo) designed the logistical solution with BHP and Steamships Trading Co. Ltd. (Steamships), a majority owned subsidiary of the Swire Group based in Papua New Guinea. River loading terminal - Kiunga Fly River km Gulf of Papua Papua New Guinea 1 Export Vessels - OGVs

3 FURTHER CHALLENGES 1. The Fly River was completely uncharted. 2. There are large seasonal variations in the height of the river due to 12m of rainfall in the catchment area each year. 3. The estuary of the Fly River is highly changeable in terms of water depth and course due to silt and mud movements. 4. The sea bed in the Gulf of Papua was uncharted generating uncertainty about whether or where a floating terminal could be secured. 5. No sea state data was available for the Gulf of Papua. 6. Solution required good redundancy due to the highly remote location of the project. 7. Regular re-supply of the mine with consumables, diesel and mining machinery was required. 8. First rate health and safety standards had to be put in place and maintained. 9. Training and building up a competent work force in the remote area was necessary. 10. Designing a solution which would monitor and minimize the environmental impact of the mine on the Fly River was a priority. PREPARATORY WORK The customer, OTML, became our partner in the analysis of the supply chain transporting copper concentrate from Kiunga to the deep sea transhipment site off shore, and feedering re-supply cargo back on the return leg. Redundancy was considered in all parts of the working solution. Thorough charting and a full hydrographic survey of the river was carried out. Both sea state and sea bed bottom data in the Gulf of Papua was recorded and analyzed to locate the ideal transhipment location. Design houses and Class (Lloyds) were tasked with developing small mini-bulk feeders, capable of river and sea navigation, which could carry bulk copper concentrate down river and diesel and containers up river for re supply. A floating terminal solution was decided upon; suitable Panamax vessels were sought which could be converted into specialist storage and loading facilities. Design meetings took place with specialized equipment suppliers re: heavy duty grab cranes for the transhipment work, weighing devices in the wires of the cranes etc. An extensive local training program was setup such that PNG nationals could crew the vessels. A dedicated office was added to Steamships Shipping & Transport division to manage the operation. OPERATING SOLUTION 1. From mine site at Mt Fubilan, to the river loading terminal at Kiunga, an overland pipeline was built to carry the copper concentrate as slurry. 2. A processing plant was constructed at Kiunga where the copper concentrate is dried, placed in a storage area then fed by conveyor to the river loading terminal. 3. A fleet of flat bottomed, twin screw mini-bulkers (each capable of sitting on the river bed when fully loaded) were custom-built for transporting the concentrate and re supplying the mine on the return leg. Lloyds Register had to create a new class in which to categorise these unusual ships tankers, which can carry bulk and containers, and which are capable of sitting aground. 4. Geared and gearless twin screw LCT s were designed for re-supplying Ro-Ro mining equipment, project breakbulk and containers. The BOSSET CHIEF, one of Steamships Shipping s mini-bulkers, being discharged alongside the ERAWAN in Port Moresby (the summer transfer location for the operation).

4 5. A Panamax bulk carrier was converted into a floating transfer terminal with extra living accommodation, helipad, three offset cranes, weighing equipment, chemical analysis laboratory and stainless steel grabs with devices to stop any spillage. The ERAWAN s three articulated offset MacGregor 30 tonne K-type grab cranes both discharge the mini-bulkers and load the large export vessels simultaneously at an average rate of 18,000 tonnes per day. Each grab load is individually weighed to ensure accuracy. Each grab load is valued at around US$ 60, A custom built research vessel was designed to house a team of scientists monitoring and reporting on the impact of the mine on the Fly River ecosystem. 7. Full land based support, including dry dock capability for the LCTs and a cadet training programme, were put into place to support the operation in Papua New Guinea. In 2008, the OBO CHIEF, one of Steamships Shipping s mini-bulkers, was lengthened and converted into a 3,580 dwt tanker capable of carrying diesel fuel up the Fly River to Kiunga for OTML. The successful completion of the project allows OTML to ship up to 3.5million litres of diesel fuel per voyage to the mine operation for heavy vehicle use and power generation. She is unique as a tanker in so far as she is designed to sit on the river bottom at times of low river levels, with a full cargo on board. The 6,228 dwt KIUNGA CHIEF, part of the mini-bulker fleet, is the largest vessel to navigate the Fly River. She is purpose built with a shallow draft and is designed to carry containers and break-bulk up the river (loading in Newcastle, Australia) and concentrate down the river on a continuous loop. The 24 metre long environmental research vessel TAHUA CHIEF, with its compliment of 11 scientists and a crew of 9, was specifically built for the client s requirements.

5 THE CNCo AND STEAMSHIPS OK TEDI FLEET M.V. ERAWAN 52,800 dwt mtrs loa Bulk transfer and silo vessel (floating terminal) M.V. OBO CHIEF 3,000 dwt Bulk fuel tanker M.V. BOSSET CHIEF M.V. LAHARA CHIEF M.V. KIUNGA CHIEF M.V. TAHUA CHIEF 2,743 dwt mtrs loa 665 dwt mtrs loa 6,228 dwt mtrs loa mtrs loa Accom - 9 crew and 11 scientists Mini-bulk carrier Landing craft type (LCT) with 25t derrick Mini bulker cum container vessel Enviromental research vessel The LAHARA CHIEF, a geared landing craft equipped with a 25 tonne derrick, carries containerized and breakbulk stores as well as equipment from Port Moresby to Kiunga. ALTERNATIVES CONSIDERED 1. Transport by road with no existing infrastructure in the remote region plus a very large flood plain in the lower reaches of the Fly River, this solution would have been prohibitively expensive. 2. Construction of a dedicated port this solution would have been very costly, environmentally more detrimental and vulnerable to dredging difficulties as no deep water exists on the coast line. 3. The copper concentrate could have been moved by pipe and pump stations necessitating extensive pipe work and the installation and maintenance of pump stations this solution was impractical given the enormous distances covered, the large flood plain and concerns over day to day maintenance. KEY POINTS CNCo worked on this project in partnership with OTML from the outset. The solution has met every one of the customer s requirements and has been extended to the perceived end of the mine s life circa The solution has brought value to OTML over and above other potential solutions. CNCo committed to a long term solution providing financial and operating stability within a potentially unstable environment. Experience has demonstrated the importance of continuous co operation and an open relationship. This is an effectively designed, successful operating solution with significant investments from both sides, founded on a sustainable, long term relationship that will have lasted the life of the mine. A profile drawing of the ERAWAN

6 For further information on the China Navigation Co. Ltd.'s offshore bulk logistics capabilities, please contact Swire CTM Bulk Logistics, a joint venture between CNCo and CTM, two highly experienced project operators: 9/F East Wing Warwick House, Taikoo Place, 979 King s Road Quarry Bay, Hong Kong Tel: bulklogistics@swirectmbl.com Swire CTM Bulk Logistics. All right reserved.