Gemco mine faces period of closure after Cyclone Megan

One of the Territory’s biggest mines faces a period of closure after a storm caused serious damage. Read how it is rebuilding.

Photos of damage to the port at Groote Eylandt after it was struck by a bulk carrier during Cyclone Megan.

One of the Territory’s biggest mines could be out of action until next year due to damage caused by Cyclone Megan.

South32’s Gemco mine suffered catastrophic disruption in March when a bulk cargo ship crashed into the wharf, making it impossible to load ore for export.

At Monday’s quarterly meeting, South32 flagged its Australia Manganese operation had suffered a 13 per cent decrease in saleable production in the nine months to March 2024 due to the impacts of Tropical Cyclone Megan.

It is predicted the mine is set to recommence export sales in the third quarter of the 2025 financial year – around January-March.

Production at the mine has stopped but with the exception of non-essential contractors a company spokesman said there had been no staff lay-offs or redundancies.

Photos of damage to the port at Groote Eylandt after it was struck by a bulk carrier during Cyclone Megan.

Over two days on March 16 and 17 Tropical Cyclone Megan severely impacted operations at Groote Eylandt, with record rainfall of 681mm and the second strongest wind gusts of the past 20 years.

“The intense weather system resulted in widespread flooding across Groote Eylandt and significant damage to critical infrastructure, including the wharf and port infrastructure and a haulage road bridge that connects the northern pits of the western leases mining area and the processing plant,” Gemco’s quarterly report said.

“The operational recovery has focused on re-establishing critical services and dewatering targeted mining pits.

“Engineering studies are under way on the wharf and haulage road bridge infrastructure restoration. These studies will inform the final schedule and capital costs.

“Based on our preliminary schedule estimate, we expect to recommence wharf operations and export sales in Q3 FY25. Alternative shipping options are being evaluated to mitigate the impact of the wharf outage.

“These options may establish partial ore export capability in advance of the wharf restoration. Further detail and anticipated capital costs will be provided once the recovery plans are sufficiently progressed. Guidance for Australia Manganese remains withdrawn.

“Australia Manganese maintains property damage and business interruption insurance. We are working with our insurers to assess the impact of Tropical Cyclone Megan and expected insurance recoveries.”

Groote Eylandt in March 2024.

The Gemco mine is a major contributor to NT Government coffers, contributing an estimated $70m each year in taxes and royalties. It is expected no payments will be made until production and exports resume.

About 90 contractors and consultants have been stood down but the mine’s permanent workforce of about 1200 remain on the payroll.

A Gemco spokesperson said the suspension of operations was temporary.

He said the cyclone was a significant weather event that flooded mining pits, caused significant damage to a critical haul road bridge connecting the northern pits of Gemco’s western leases and the processing plant. There was also significant structural damage to the wharf and port infrastructure.

“We are continuing to work through options to support a safe return to operations as soon as possible,” he said.

“As a result of the suspension of operations due to the impacts of the cyclone, we have temporarily stood down some contractors and consultants not involved in the work we are undertaking,” he said.

“All of our permanent GEMCO employees who are not currently involved in our work on Groote Eylandt have been asked to remain fit and available for work and continue to be paid as normal while our assessments continue.

“We remain in close contact with members of our workforce, the community and other stakeholders as the situation evolves. We will communicate any additional changes if required directly to our workforce.

“We understand this is a challenging time for everyone on Groote Eylandt, including our workforce. We appreciate their patience and understanding as we work through the current challenges.