With the ongoing energy transition and subsequent technological advances, the world needs copper now more than ever. Demand is at historical highs and, according to projections, will remain there for the foreseeable future.
This is where Australia could be key. But although home to around 13% of global copper reserves, beaten only by Chile, Australia accounted for just 4% of global production in 2023, leaving it languishing in eighth place.
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Recognising this imbalance, perhaps, BHP made a firm commitment to the country’s copper mining sector with its mid-2023 A$9.7bn ($6.4bn) purchase of South Australia’s OZ Minerals.
The acquisition saw BHP take complete ownership of Prominent Hill, which the company says boasts one of the highest grades of copper concentrate in the world, and the Carrapateena copper-gold mine in South Australia, along with a handful of other copper and nickel projects on the west coast.
Speaking at the time, BHP chief operating officer Edgar Basto said the deal would help create opportunities.
He stated: “South Australia has the potential to be a major supplier of copper to meet the world’s increasing demand… we look forward to unlocking the potential of our people and their combined talent.”
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By GlobalDataBHP CEO Mike Henry added it “would provide options for growth, bring new talent and innovation to unlock these resources in a sustainable way, and deliver value to shareholders and communities”.
Investing in South Australian copper
In the weeks and months that followed, BHP Copper South Australia announced a raft of initiatives aimed at cementing its foothold in the region’s copper industry – home to some of the world’s most significant deposits of copper, gold and uranium.
This included plans to expand copper refining facilities at Olympic Dam and the ramp-up of exploration activities at Oak Dam to help BHP “better define the resource” and ultimately decide on the future of its development activity.
Most recently, referencing its earlier commitment to sustainability, BHP Copper announced it had signed four contracts with Australia’s largest rail freight operator, Aurizon, calling it the company’s most significant logistics arrangement since its formation. The approximately A$1.5bn 15-year partnership will see the full integration of rail, road and port logistics capabilities.
Aurizon’s managing director and CEO Andrew Harding tells Mining Technology that the company will be responsible for the entire transport supply chain, including rail haulage, road transport, terminal management, port management and stevedoring.
Pit-to-port and road-to-rail
The emphasis, though, is to shift road haulage to rail where possible.
BHP Copper says the transportation of copper concentrate and cathode from its Olympic Dam, Carrapateena and Prominent Hill mines, as well as other inbound freight, will move to rail between a new terminal near the region’s mining province at Pimba and Port Adelaide.
Road transportation will take place between both mines and Pimba, overseen by existing BHP transport provider Symons Clark Logistics (SCL), through a sub-contract with Aurizon.
Harding says: “Aurizon’s aggregate logistics task is around 1.3 million tonnes per annum, servicing the mining and refinery/smelter operations at… [the] mines.”
Mine inputs mostly consolidated at Aurizon’s existing terminal at Port Adelaide, Berth 29, will be railed 500km north to the new intermodal terminal at Pimba before delivery by road to the three mining complexes. Copper concentrate and cathode produced at the mines will make that journey in reverse.
Asked if the agreement requires a large capital expenditure on infrastructure, Harding says Aurizon will leverage existing assets and infrastructure, including the One Rail business it acquired in 2022 and its 2024 purchase, Flinders Logistics, resulting in “a capital-efficient solution”.
“The total capital investment is approximately A$100m, with the single largest investment of around A$40m in [a] new intermodal terminal at Pimba.”
The terminal is earmarked to sit adjacent to the existing Australian Track Corporation-operated national rail corridor, meaning that, combined with Aurizon’s Berth 29, BHP Copper’s logistics function will benefit from almost direct rail connectivity at both ends.
“Aurizon’s hub and spoke model, featuring SCL’s efficient road fleet for ‘first mile’ and ‘last mile’ deliveries to [the] central hubs of Port Adelaide and the Pimba terminal, and modern freight trains for long hauls represents best practice in bulk freight land transport,” says Harding.
Despite the acute vagaries in global supply and demand, a significant consideration in making this agreement was the scalability to respond to BHP’s success in the region.
Harding says Aurizon can scale up volumes by adding additional rolling stock – locomotives and wagons – to the haulage task, and by utilising available capacity on the existing railway infrastructure: “Likewise, the Pimba intermodal terminal will be designed for expansion to support the customer.”
Safe and sustainable logistics
In addition to a more efficient and cost-effective logistics model, it is perhaps safety and sustainability that BHP Copper is most enthusiastic about. After all, when announcing the partnership BHP’s CEO said the agreement would sustainably unlock resources.
Harding explains: “By shifting the majority of BHP’s volumes from road to rail, we will reduce truck movements on South Australia’s roads by an estimated 13 million kilometres annually.”
That is the equivalent of around 11,500 truck movements, helping to cut carbon emissions by an estimated 20,000tpa, he suggests. It will also deliver improved regional road safety and reduce congestion, Aurizon argues.
The company – which transports rail freight across the entire continent, with journeys stretching as far as 3,000km – says rail solutions can help decarbonise supply chains, improving safety and community outcomes at the same time.
“Rail is the safest, most environmentally friendly way to transport bulk freight, especially over long distances,” concludes Harding.
“This is where rail excels.”
In 2024, there were approximately 32,000km of open railway track in Australia, with the network shifting close to double the amount of freight than by road (approximately 448 billion tonne-kilometres compared with around 249 billion tonne-kilometres, respectively), according to the Australian Government.
Australia’s rail network is playing an increasingly pivotal role in its economic success and the global drive to decarbonise. With demand for copper expected to grow, BHP Copper SA’s desire to ship by rail will only grow too, reflecting what is probably a broader industry appetite.
With the Western Australian government looking to bring its freight rail network back into public ownership after 25 years of privatisation, recognising the vital role it plays in the economy, and industry giants such as BHP actively seeking to shift to rail, it seems the days of road haulage at scale could be set to hit the buffers.
