WA’s most labour-intensive iron ore mines could be just 10 days away from diesel supply catastrophe

WA iron ore mines supporting about 1000 jobs face catastrophic fuel shortages in as little as 10 days, yet their plight is being ignored in favour of larger rivals who are far more insulated from supply shocks. Fenix Resources, Gold Valley and Yilgarn Iron, which each employ at least 300 workers via small iron ore mines dispersed across the Mid West and Goldfields regions, are among the State’s mining companies to so far bear the brunt of a diesel supply shock. Further north, the Pilbara iron ore behemoths of BHP, Fortescue and Rio Tinto have large fuel reserves to tap into and can get diesel direct from refineries, WA’s smaller players are vying to secure supply from a frenzied secondary market. “We’re dealing with fuel distributors . . . and so we’re currently ringing them up every 10 minutes, asking when our next delivery is,” Fenix executive chair John Welborn told The West Australian. “In the scheme of things we’re OK because others who don’t have long-term distributor relationships like us are having to play the spot market and they’re finding it really difficult to get a tank of fuel at all.” “It [diesel supply] is probably great for the next five days, in our case five to 10 days. “But if at any point that supply stops . . . we’re maybe five days away from starting to turn off our machines, and that starts to obviously impact all our operations.” Gold Valley owner Yuzheng Xie said his company was in a similar situation. “We have started to cut back trucking but we have a plan to not shut down completely — even if we stop trucking altogether we will keep mining for a bit,” Mr Xie said. “The fuel impact has been huge, between the freight and mining it’s costing us $US20 a tonne more.” He called on any immediate government intervention to focus on the State’s smaller miners and lamented that most of the spotlight on fuel impacts to the mining industry has so far been on the industry’s heavyweights. The Minerals Council of Australia on Monday urged the Federal Government to ease competition laws to allow the likes of BHP, Fortescue and Rio to collaborate on fuel supply. Those three companies are said to each be sitting on more than a month’s worth of reserves and have the financial muscle to directly procure deliveries from countries like Singapore. Yilgarn Iron director David Paull said his company’s Goldfields mine sites had about two to three weeks of fuel left and urged the government to put broader “contingency plans” in place. “Those contingency plans could include government foresight and assistance in relation to securing supply for the guys who can’t hire their own boats out of Singapore,” he said.