A large mining operator is following the lead of some district quarries by opting for rail over road.
Heron Resources, which has been resurrecting the former Woodlawn Mine near Tarago, announced on Thursday that it would be shifting its ore concentrates by rail from Goulburn.
The move is estimated to eliminate 6000 annual B-double movements on the Hume Highway. The company believes it also reduces operating risks in moving the product
Chief executive Wayne Taylor said the company had signed up Crawford Freight Lines to move an eventual 120,000 tonnes of ore annually from Goulburn to Port Botany and Port Kembla for export.
“We think it’s a fantastic opportunity,” he said.
“They have a significant local presence and we’ve been pleasantly surprised by the infrastructure they have. It means we don’t have to bring trucks into Goulburn.”
Crawfords operates from the rail hub at South Goulburn, off Braidwood Road. The Newcastle-based company expanded into Goulburn after picking up a timber haulage contract with International Primary Products. It took this over from Qube Logistics which recently pulled out of the city, laying off some 20 local drivers in the process. Crawfords also hauls scrap metal from Canberra through Goulburn.
But Heron’s contract represents a significant boost for the company. It also marks a turnaround in the miner’s transport attitude.
Heron’s development application, approved in 2013, relied on truck transport directly from the site to port.
“Previous indications we had of rail were that it was more costly but Crawford has a very good set up on the ground,” Mr Taylor said.
“All through the studies we tested the market on what was available. We’re not price setters but price takers and we have to watch our bottom line very carefully. We have to look for comparable prices.”
Mr Taylor said the company’s base case initially relied on trucks because the data was easier to access whereas the economics of rail transport were less certain. But as time and development progressed, Heron decided to “cast its net wider and explore all options.”
“It’s not necessarily the cheapest solution but it’s one that brings benefits...We like the idea of getting trucks off the road,” he said.
Trucks will still travel from the Collector Road facility, some 10km west of Tarago, along Bungendore Road to Tarago and then the 40km along Braidwood Road to Goulburn. Crawfords has a siding near the Braidwood Road rail hub where containers can be stored.
Heron has approval to run 12 to 20 trucks daily, 300 days a year during operating hours. Mr Taylor said studies showed there would be “negligible impact” on the transport route but his company would look to minimise any effect on residents.
He anticipated one train, with 56 fully laden containers, would run every three days from Goulburn to the ports.
Heron has approval to extract 120,000 tonnes of zinc, copper, lead, gold and silver concentrate annually. But Mr Taylor said this volume would take time to reach.
The company has been gradually expanding its exploration around the mine, which closed in 1998 when former operator Denehurst struck financial trouble.
Mr Taylor said these investigations had turned up good results.
“We’re still drilling the G2 shallow mineralisation and getting to a point where we can put a detailed mine design around the underground,” he said.
The mine has seen a flurry of construction with about 30 per cent of the site and half of the total project complete. All earthworks have been finished, plant has either been ordered or is onsite and construction of offices well underway.
The company has also struck an electricity supply contract with a major provider.
Heron directly employs 20 people onsite, including former production superintendent Brian Hearne, who is now general manager. Mr Taylor said 100 contractors, also comprising Sedgman which was building the $107 million processing plant and associated infrastructure, were also at Woodlawn.
Once operating, Heron will employ 150 full time people. Recruitment in earnest will start soon.
Commissioning is expected to occur by the end of this year, with the first shipment of product to port planned for early 2019.
Chicago Freight owns the Goulburn Rail Hub. Its Asia Pacific executive chairman Ian Gibbs welcomed the decision to opt for rail.
“I believe it ticks all the boxes about business growth in Goulburn area; more jobs for the local community, it utilises the Goulburn container terminal to transport containers by rail for the export market, using local affiliated businesses and, just as importantly, takes trucks off the Hume Highway,” he said.