Launching a new blend

In early July 2007, Rio Tinto Iron Ore (RTIO) will begin shipments of new lump and fines products that together will represent approximately 15 per cent of the seaborne iron ore trade. The new products will be called Pilbara Blend or PB for short.

The blending of ores from different sites to produce quality saleable products has been part of the production process at Hamersley Iron since the early 1970s and the new PB products are set to deliver reliable, long-term iron ore supply with stable absolute quality and low variability to customers.

General Manager Market Positioning Pasquale Perazzelli explains how PB will help meet the needs of the growing iron and steel industry but before he does, here's a quick recap on the products that RTIO has been supplying from the Pilbara over the last few years.

Since 2004, Hamersley Iron has shipped five products from Dampier and Robe has shipped four products from Cape Lambert, a total of nine products. This total was scheduled to increase to eleven products within a few years.

But as Pasquale explains, continued strong demand for iron ore warranted further expansion of operations in the Pilbara and in 2005 RTIO considered offering a simplified product that would provide benefits for both customers and the business.

"The Hope Downs Joint Venture agreement, further progress in developing Hamersley and Robe synergies and securing approval to ship any product through Dampier or Cape Lambert enabled us to look at offering simplified products," says Pasquale.

"Rio Tinto aims to meet market demand with reliable, long-term supply capability, stable product quality, iron ore products aligned with its resource base while best utilising an expanding asset base."

"We have a strong track record of supplying quality blended products to customers, so the extension of this blended product concept to prepare and supply PB, a blend of all the Brockman and Marra Mamba ores, is well understood by most customers," says Pasquale.

"Both Rio Tinto and customers evaluated the proposed PB products during 2006. Pilot tests and plant trials carried out by customers showed the performance of PB products was equivalent to that of existing products. This has given customers confidence that the new PB products can be used successfully," Pasquale explains.

"Customers will also gain logistics and ship-scheduling benefits as a result of the simplified product being offered."

"With more quality management capability at both Dampier and Cape Lambert, low variability should be achieved providing customers with greater confidence in supply."

"From July, we will ship five products from the Pilbara - Pilbara Blend lump, Pilbara Blend fines, Yandicoogina fines, Robe Valley lump and Robe Valley fines," says Pasquale.

"A short transition period from the nine products currently shipped from the Pilbara to five products will minimise the time required to prepare and handle existing products and PB products concurrently at Dampier."

"During the transition period, close communication will be needed between port operations, the Perth based ship scheduling team and customers; but with cooperation from all parties the transition to PB should be relatively seamless," explained Pasquale.

"The challenge ahead for us will be to ensure our sites providing components of PB deliver planned quality and tonnage consistently so the PB products can be prepared at Dampier to meet our commitments and the expectations of our customers."