The long-winded delay in expanding the Esperance Port is costing the State Government royalty payments of $95 million a year, a report into the economic impacts of the expansion claims.
The report, produced by consultants AECOM and commissioned by the Yilgarn Iron Ore Producers Association, predicts the flow-on effects of developing a 10 million tonne per annum port for iron ore miners at Esperance and the development of associated mines could create more than 3200 jobs.
Although the 10mtpa expansion is tiny in comparison to developments in the Pilbara, the port project would essentially create a third iron ore province behind the Pilbara and the Mid-West and, according to the report, produce a flow-on effect for the WA economy of up to $627 million annually.
The expansion is underpinned by junior iron ore hopefuls in the Yilgarn region such as Cazaly Resources, Buxton Resources and Mindax. Global player Cliffs Natural Resources and WA giant Mineral Resources are also supporting the development. The companies are all members of the Yilgarn association.
The delay in approval has effectively hamstrung some Yilgarn miners through the shortage of port space across WA. A decision is not expected until after the State election.
The Yilgarn group claims a "modest" investment of less than $200 million at Esperance would enable the development.
According to the report this would be mitigated through an initial boost to the WA economy of up to $558 million.
However the market still has doubts over the companies involved in the Yilgarn development, with many dropping in value despite a rise in the iron ore price over the past two months.
Cazaly Resources, which says it is ready to mine at its Parker Range iron ore project as soon as the expansion takes place, has suffered under the weight of the delay, with its share price dropping from 24.5¢ at the start of last month to close at 17.5¢ yesterday.
Buxton was hit by a small fall during the iron ore recovery period, dropping from 42¢ at the start of last month to close at 40.5¢ yesterday.
Mindax has been steady.
CAZ Price at posting:
17.0¢ Sentiment: None Disclosure: Held
