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Dampier Salt Mines, the world’s largest solar salt exporter, has undergone a cultural and operational transformation over the past two years. Gay Sutton talks to managing director Denise Goldsworthy about establishing the processes for reliability, and preparing the company for growth

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Dampier Salt Mines, the world’s largest solar salt exporter, has undergone a cultural and operational transformation over the past two years. Gay Sutton talks to managing director Denise Goldsworthy about establishing the processes for reliability, and preparing the company for growth

Rio Tinto: Dampier Salt Mines

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Rio Tinto: Dampier Salt Mines

Western Australia’s minerals and petrochemical industries are in the grip of an unprecedented boom, and its salt mining enjoys a unique position in this ongoing story. Dampier Salt Mines, a subsidiary of global mining giant Rio Tinto, is the largest exporter of solar salt in the world and has been operating in the Pilbara region of Western Australia since the mid 1950s. Unlike other mining companies, its resources are renewable.

Rio Tinto: Dampier Salt Mines

The process begins by taking brine from the sea or from Lake McLeod—a saltwater lake replenished by seawater seeping through limestone rock—and growing the salt crystals over a period of two years in a system of interlinked salt fields. By using the sun and wind as the drying agent, some 99 per cent of the energy used in the business is also renewable, creating an impeccable environmental record. “And all this means that we can potentially stay in these locations for ever,” comments managing director Denise Goldsworthy.

The company’s headquarters are in Perth, with sales and marketing offices in Singapore, and the salt is mined from three sites in the Pilbara region. The largest, Dampier, is located between the townships of Dampier and Karratha. Employing some 150 people, it produces 4.5 million tonnes per annum. The second mine is located east of that, at Port Hedland, employing 100 staff and producing around three million tonnes of salt per year. The third site is at Lake McLeod which also produces three million tonnes per annum but employs 150 people. “We provide salt for every continent except South America at the moment, but our traditional customer base has been Japan, Korea and Taiwan,” Goldsworthy says.

In order to grow the business and take a more prominent role in the highly competitive export market, the company realised it had to make changes. “Essentially, we had to control our external reputation and improve the profitability of the business,” Goldsworthy explains. “A key part of this was to throw off the shackles of old thinking and to take our destiny in our own hands. I prepared a major strategic plan in 2008, and was put in the role to implement it.”

The plan had both internal and external elements, which progressed hand in hand. Externally, the aim was to offer the customers (most of whom are big capital intensive chemical processing plants requiring reliable feed materials 24 hours a day) a higher level of reliability than any other salt supplier, and consistent high quality.

The internal element involved re-engineering the operations to make them more flexible and cost effective. Western Australia is liable to cyclones which can bring salt production to a halt. “We had to become flexible enough to move salt production and people from one site to another so that we could maintain our output regardless of the weather. We had to put systems and processes in place so that if a site was running at 25 to 30 per cent turnover—which happens regularly—the business can keep going,” Goldsworthy continues. “And we also needed to maintain our corporate knowledge because, as a low-margin business we couldn’t afford to keep reinventing the wheel.”

The strategy for achieving this flexibility and profitability was to design a single common approach to all operational and administrative aspects of the business, and to align them with the corporate goals for quality, safety and cost. This resulted in a single way of doing things throughout the company that was clear and easy for everybody to follow. “Now,

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Rio Tinto: Dampier Salt Mines

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Communications and relationships within the business also play a key role in achieving agility. Safety, health and wellbeing are a major focus throughout the

company, and staff are kept abreast of the business goals, priorities and risks. By trusting them with the information and making sure staff feel looked after, Goldsworthy believes they are much more willing to work with the flexibility the company requires.

The final piece in the change process was a tough negotiation with the customers to increase prices in line with the cost of ensuring this increased reliability. “When you’re in the middle of a tough tender and there are half a dozen suppliers, the argument often come down to the lowest cost. But when there have been cyclones and there’s been a salt shortage, then reliability is the core issue—and Dampier can guarantee the supply.” It

is turning out to be a winning argument for customers who require reliability.

The improvements have certainly seen the company through the global financial crisis two years ago. “If we had been running the

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Rio Tinto: Dampier Salt Mines

way we had for the previous 35 years, the changing exchange rate over the last three years would have sunk us as a business,” Goldsworthy says.

The company is also working to optimise the synergies with other Rio Tinto companies in the region. “Our iron ore brothers operate on a massive scale,” she explains. “And when we’re able to piggyback on their larger volume demand, we are able to procure materials and equipment far more cheaply than as a standalone company.” But the benefits are not just one way. As a smaller and more flexible organisation, Dampier works with them on new management or operational practices. “We pilot them and get them right, and then scale them up into iron ore.”

An example of this is the work currently underway on a mental health and wellness strategy for the staff. “One of the unfortunate problems of the northern Pilbara towns is that there is quite a high rate of depression, divorce and suicide. And it’s related to the extremely hot climate and to the temporary nature of the communities here. So, working closely with a smaller group in the company we are exploring what we do, as a company, that contributes to mental wellbeing or difficulties, and then we work out what we can do differently in terms of site policies, role descriptions support, training and so on, to mitigate these issues. It’s not an easy thing to do, but once we’ve worked through it and established useful practices, we hand them over to our iron ore brothers who can then begin to adopt them.”

Over the past few years the company has made some significant investments in the business. A programme of capital equipment replacement has almost reached its conclusion, bringing all the machinery and assets up to date. Meanwhile all three salt mines have been expanded.

Today, Dampier and Hedland have almost reached their maximum size. Lake McLeod, however, offers plenty of room for expansion. China is already a growing customer, and Goldsworthy believes there are tremendous opportunities to be realised in India and Indonesia in the near future. With the changes

of the last three years in place, the company has established a firm springboard from which to launch an assault on the growing global marketplace. www.dampiersalt.com.au BE

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RIOTINTOwww.dampiersalt.com.au