WESTBUSINESS • Wednesday, May 21, 2014 ONE FAMILY'S DESTINY THE ROY HILL IRON ORE PROJECT PROUDLY SUPPORTING THE Roy Hill Iron Ore Project Strong relationships can be the difference between total commitment to delivering 110% that has seen achieving ordinary and extraordinary results. At BGC us continue to win repeat business with the likes of Contracting, we pride ourselves on the partnerships Roy Hill, Atlas Iron, Arrium, Rio Tinto, BHP Billiton & we have established, cemented and grown with our Cliffs Natural Resources to name a few. We put in the clients over the past 20 years. We believe that we’re hard yards and go the extra mile to ensure our clients only as good as our last project and therefore strive achieve their goals. When your project is ready to go, to work harder, smarter and safer everyday. It’s this we’re ready give it 110% to help you achieve yours. LEADERS IN MINING AND CIVIL CONTRACTING Perth (08) 9260 2300. Brisbane (07) 3119 0900. Whyalla (08) 8647 8411. WWW.BGC.CC SHED_BGCC0058 Making history with Samsung C&T. A global leader in construction services – Samsung C&T is the lead contractor developing Roy Hill’s iron ore mining, rail and port infrastructure. Samsung C&T is a proud partner of the Roy Hill project, committed to developing projects that deliver great outcomes for the local economy and communities. Samsung C&T 2 Bagot Road Subiaco Western Australia 6008 The Roy Hill Project 4 Wednesday, May 21, 2014 A message from the Premier he Roy Hill iron ore project is one of the most that well-planned projects are able to weather significant projects to be undertaken in changing economic climates. TWestern Australia in recent years. The iron ore industry is already a major pillar At an estimated cost of $10 billion, the Roy Hill of the WA economy, employing thousands of project is the largest iron ore project under workers and contributing around $4.3 billion in construction this year globally, with a capacity of royalties in 2013. 55 million tonnes at full production. By 2020, WA could be exporting 850 to 950 Construction of this massive project, which million tonnes of iron ore, some 50 per cent more includes new railway and port facilities, will than current output levels. create around 3600 jobs, and ongoing operations First shipments from Roy Hill are expected by will require 2000 workers. the end of 2015, further cementing the State’s Recently, Roy Hill reached a significant position as a global leader in the iron ore market. milestone with the completion of a On behalf of the State Government, I would like US$7.2billion funding package to deliver to congratulate all those who have been involved the project, involving five international in this project’s progress so far, including Roy export credit agencies and commercial Hill’s parent company Hancock Prospecting, and banks from across the world. joint venture partners Marubeni, Posco, and The finalisation of this funding package China Steel Corporation. represents a vote of confidence in the ongoing I would also like to congratulate those within performance of West Australia’s resources Government who have worked to facilitate the industry from the international finance sector. development of this major project, including At a time when some onlookers are sceptical through the negotiation and implementation of a about future growth in the West Australian State Agreement, and in progressing native title, resources sector, the Roy Hill project is proof that environmental and other approvals. significant projects are still on the horizon, and Colin Barnett INSIDE From Roy Hill’s chief executive he company we build today will determine how successful we Tare moving forward. To drive and maximise efficiencies across the business, we have integrated our corporate, marketing and operations functions through our new corporate head office and remote operations centre. THE ROAD TO ROY HILL P6-8 THE HOUSE OF HANCOCK P10-11 Because we are constrained at Getting the $7 billion needed to pay A chance sighting over the Pilbara in Port Hedland in regard to how much for everything was just the start. the 1950s changed history. we can export, we must do things differently. It is a business imperative our people know how to work smarter, apply fit for purpose thinking and focus on value to ensure a maximum return to our shareholders. A key driver of success is the foundation that is set in regards to how the company operates and the behaviours people bring to the HOW IT WORKS P12-16 THE NERVE CENTRE P22-23 workplace. Inside the Roy Hill operation — from The ore body may be in the Pilbara One of the unique challenges of mine to port. but Roy Hill’s brain is in Perth. being a greenfields project is embedding a culture that aligns employees to our vision and empowers them to achieve our goals. Our vision and values of lead, care, think and perform go to the heart of who we are, what we stand for and what each and every one of us needs to do to achieve success. Roy Hill is a landmark mining project which will deliver enormous benefits to the broader community. A RICH BENEFACTOR P26-28 THE END GAME P30-31 These are exciting times as we How wealth created in the Pilbara Inside the Chinese steel mills which continue to build one of the world’s pays for the great Aussie lifestyle. drive the iron ore industry. major resource-based projects. Barry Fitzgerald The Roy Hill Project 6 Wednesday, May 21, 2014 For A new kid on the red dusty block Roy Hill is a project 22 years in the making. STEPHEN BELL charts its history n a balmy March evening Gina Rinehart and a host of international financiers Osigned a thick sheaf of documents in a Singapore business room. The Hancock Prospecting chairwoman had just made history by inking a US$7.2 billion loan agreement for her Roy Hill iron ore development — the biggest project financing ever completed for a mining venture. Groundbreakers: Hancock Prospecting’s John Klepec, Tad Watroba, Gina Rinehart and Roy Hill chief executive The backing of the five export credit agencies Barry Fitzgerald start work at Roy Hill’s corporate headquarters and remote operations centre in June, 2012. Gr and 19 banks was sweet vindication for Australia’s richest woman. recent Singapore function to celebrate the debt The forecast sailing of Roy Hill’s first cargo from rel She’d endured years of speculation that her $10 milestone. Port Hedland late next year will represent the A billion mine, rail and port project would struggle “So we set up a beautiful sit-down luncheon at high water mark of a remarkable 23-year journey Ri to secure debt funding as other Pilbara miners the side of the Fortescue River and I had the that began in March 1992 with the death of Mr ge slashed expenditure after a fall in iron ore prices pleasure of being able to personally meet every Hancock — the man credited with uncovering dr and rising Australian costs. participant and discuss the importance of their much of the Pilbara’s vast iron ore riches in the scr Credit was a scarce commodity and the cautious support.” 1950s. bankers eked out their painstaking due diligence The debt deal ensured the chairwoman would Pi for 15 months, including site visits to Roy Hill — achieve a long ambition of owning and running a oy Hill wasn’t among the deposits identified wi about 270km south of Port Hedland near the Pilbara iron ore mine unrelated to the legacy of by Mrs Rinehart’s father. It is a separate M Chichester Ranges. her famous father, Lang Hancock. So confident Rarea to the north of Newman once held by Ch “When the commercial banks came to visit, we was she of wooing the bankers that Roy Hill was competitor BHP Billiton. ar were determined to give them an experience that nearly one-third built by the time the bank deal “Fortunately our competitors’ drill holes were of they would never forget,” Mrs Rinehart said at a was finalised. not in the best locations and they had T P w PM thewest.com.au The Roy Hill Project 014 For all the latest news 7 Road to Roy Hill MARCH 1992 Gina Rinehart assumes chairmanship of Hancock Prospecting after the death of Lang Hancock MID 1992 Gina Rinehart and Richard Paquay, Hancock Prospecting’s chief geologist, conduct their initial prospecting trip to Roy Hill JAN 13, 1993 Hancock Prospecting granted Roy Hill exploration licences JANUARY, 2010 Korean groups POSCO and STX Corp. make initial $332 million investment in Roy Hill JUNE 2, 2011 Dredging operations begin at Port Hedland’s inner harbour MARCH 30, 2012 Asian consortium led by Korea’s POSCO and Japan’s Marubeni pays $3.2 billion to complete 30 per cent purchase of Roy Hill JUNE, 2012 Construction starts on $47 million headquarters and remote operations centre at Perth airport MAY 25, 2012 Approval to hire up to 1715 foreign e workers under Labor government’s Grand scale: An aerial view of the Roy Hill mine site in April. Roy Hill is destined to be the biggest single-pit mine in the Pilbara. first Enterprise Migration Agreement generates media storm om relinquished the tenements,” Mrs Rinehart said. for the area to be pegged and exploration licences MARCH, 2013 Signs a $5.6 billion fixed price A few months after her father’s death, Mrs were granted to Hancock Prospecting in 1993. construction contract with South y Rinehart and Hancock Prospecting’s chief However, in those pre-boom days iron ore was an Korea’s Samsung Group geologist Richard Paquay flew to Newman and unloved commodity and Hancock was under drove 120km to Roy Hill, an unremarkable patch of financial stress, according to Mrs Rinehart.