The Pilbara’s fledgling iron ore producers are likely to be asked to pay upfront to guarantee a toehold in the increasingly congested inner-harbour berths in Port Hedland.
Unwrapping a long-awaited deal with BHP Billiton to increase the port’s capacity to 400 million tonnes a year, State Planning and Infrastructure Minister Alannah MacTiernan yesterday gave her clearest indication the smaller players would be tapped for the cash to fund the 50mtpa of berth capacity earmarked for them.
“What we do with some (of the other users) is say: here’s your port user charge for the next 10 years, you give us that money upfront and then we use that as capital to add to their capacity,” Ms MacTiernan said.
“So we could do that with a number of the smaller players.”
With a handful of would-be exporters edging closer to production, port space in the Pilbara is an increasingly important and time-critical issue, particularly given the limited multiuser berths available and the refusal of BHP Billiton and Rio to open their facilities to third party access.
Shipments from Port Hedland are expected to treble to about 440mtpa over the next five years as existing players ramp up their iron ore production and new producers, such as BC Iron, Brockman Resources and FerrAus, come online.
The WA Government’s $225 million Utah Point berth is expected to be running by 2010, pending environmental approvals, while the South West Creek berth is not expected to be operational before 2012.
Ms MacTiernan’s comments came as BHP confirmed its own port expansion, yesterday finalising a deal with the Government and the Port Authority to boost the miner’s capacity in the inner harbour to 240mtpa with four more Cape-size berths, for the biggest carriers.
The move will increase the port’s total inner-harbour capacity to 400mtpa, on top of the planned 400mtpa outer harbour development, expected to be ready by 2015.
It represents a key milestone for BHP’s plan to lift its iron ore output from about 150mtpa to 300mtpa by 2015, assuming the proposed outer harbour project goes ahead.
BHP Billiton is yet to disclose the likely cost of the outer harbour development, but has said it would include extensive dredging around the proposed berths for up to eight carriers as well as a 27km sea channel and a jetty.
In a sign the Government is becoming increasingly aware of the surging demand for port access and the need to prevent it from being swallowed by the industry’s dominant players, Ms MacTiernan said the State was negotiating to determine how the remaining capacity would be divided up.
Among those companies in negotiations is Fortescue Metals Group, which has about 55mtpa of capacity but is looking for more.
“We can accommodate everyone’s operations through the outer harbour so what we’ve got to judge is who’s ready to go (and) how do we get the best use out of the infrastructure,” Ms MacTiernan said.
“Obviously everyone wants the inner harbour to begin with, and we’re trying to share that inner harbour space equitably and with a mind of who is actually going to be ready to go. Because we don’t want to be sitting on space in the inner harbour while there are other people who could be using it.”
KATE EMERY Edited by SEAN SMITH
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