HIO (ASX) Port thoughts

Originally posted by That Fundamental Guy: ↑

I was talking with someone recently who commented that Hawsons should just forget the slurry pipeline and train to Whyalla. That sparked a thought that I had following the announcements of Federal and State Government Grants to support a hydrogen export hub at Port Bonython.

My thought being, "Could iron ore be exported from a deep water port at Port Bonython?". Part of the reason why I had that thought, is because I wondered if the State and Federal Governments would be willing to fund expansion/development of two deep water ports in South Australia.

From some preliminary research, it seems a real possibility that iron ore could be exported from a deep water port at Port Bonython.

Port Bonython is located approximately 16 kilometres from Whyalla along the Upper Spencer Gulf. Port Bonython has access to an existing deep-water port that facilitates the large-scale export of liquid hydrocarbon products from the Cooper Basin oil fields, as well as access to 1,700 hectares of developable land[emphasis added] and considerable wind and solar resources. The above was from a CSIRO article titled "Port Bonython and Whyalla Hub". The following is from Wikipedia.

Port Bonython Bulk Commodities Export FacilityAfter identifying shortfalls in bulk commodities export infrastructure, four emerging mining companies formed the Port Bonython Bulk Users Group in 2008. A competitive tendering process to plan, build and operate the common user Port Bonython Bulk Commodities Export Facility was facilitated by the South Australian Government with the contract awarded in 2008.

An Environmental Impact Statement for the Port Bonython Bulk Commodities Export Facility was published by the Spencer Gulf Port Link consortium in 2013. Public submissions closed on 18 November 2013. The time period for consideration of the Federal environmental approval was extended at least four times, and was anticipated on or before 31 December 2014. As of August 2018 no decision regarding Federal environmental approval for the facility has been made. No final decision was ever published.

The proposed bulk commodities export facility was intended to be open access and managed by consortium. The consortium included Flinders Port Holdings, Australian Rail Track Corporation, Leighton Contractors and Macquarie Capital.

Prospective miners with iron ore deposits in the state's far north, including within the Woomera Protected Area were the most likely to utilize the facility, were it ever constructed. WPG Resources is one such company.[28] BHP also expressed interest in considering Port Bonython for the potential future export of copper concentrates to China, were the Olympic Dam mine to expand to an open cut operation.[29] All four mining companies that formed the Port Bonython Bulk Users Group either found alternative pathways for iron ore export or abandoned their iron ore prospects entirely. WPG Resources and IMX Resources successfully exported from other ports while Ironclad Mining and Centrex Metals did not proceed to mine development.

So what about the distance to Port Bonython from Hawsons in comparison to the proposed slurry pipeline to Myponie Point?

To give a rough indication, I jumped on to google maps and from Cockburn (on barrier highway near Broken Hill) it is 416km. From Cockburn to Port Bonython is 452 km. The round trip image below gives a visual of the distances not being that different.

Therefore, potentially not much longer for a slurry pipeline to Port Bonython than Myponie Point and possibly a little flatter (just guessing based on less green - happy to hear from anyone who has driven those roads).

There is also the option to rail to Port Bonython. From Wikipedioa "The Whyalla railway line connecting Whyalla to Port Augusta is standard gauge. The national standard gauge system extends from Port Augusta to Darwin, Perth, Adelaide and other regional towns."

Therefore there is an existing rail line to a deep water port flagged for expansion.

Does this pose a genuine opportunity to reduce initial capital costs to rail to an existing port flagged for expansion that where a slurry pipeline could still be built at a later date once cashflow allows?

And think about this. There are reasonable prospects of Gupta being able to build his vision for the Whyalla steel works and make green steel. If Australia wants to be truly competitive on a world scale, why not have South Australia's bulk commodities export hub near one place in SA that could potentially use that resource and not just export to other countries to value add?

Having an efficient deep water multi user bulk commodities export facility would allow Whyalla steel works to purchase from a collection of mines that could get developed if SA have an efficient deep water port allowing the Steel works to purchase iron ore at a competitive price without additional transport costs. Having an efficient export facility would also mean that mines would not be subject to a single customer and could sell to Whyalla steel works or export.

To me, developing the area around Port Bonython into a world class efficient deep water export facility for hydrogen and bulk commodities seems like it could be in the nations bests interests.

What I like is that that Hawsons has potential access to Port Bonython and Myponie Point, so either option can work, but I wonder if Port Bonython has a better chance of getting more government funding and being an existing port, less costly and fewer development approvals required.

Expand

Pretty sure Port Bonython channel (11-12m) prohibits the large Cape and Chinamax ships from getting anywhere near the port (deeper but still only 15m).

My checks when we floated Myponie Point indicated all parts of that upper spencer gulf water is not good for ore carriers which is why HIO zeroed in on Myponie Point which although even shallower has deep water accessible from a jetty kilometers long.

Always has been my view that all players need to join a co-op.

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