Posted by echo on Saturday, May 12, 2012 in Hedland News | 0 comments
A proposed Pilbara railway that would break the dominance of the iron ore majors is under threat.
The Port Hedland Port Authority is trying to force emerging mining companies behind the rail proposal to slash their allocated berth space at the giant harbour.
The port wants the North West Infrastructure partners – Atlas Iron, Atlas subsidiary FerrAus, and Brockman Resources – to cut their annual allocation at the planned South West Creek facility from 50 million tonnes to 35 million tonnes.
A desire to free up capacity for future potential industrial projects at the nearby Boodarie industrial estate – scene of BHP’s disastrous HBI project – is said to be behind the authority’s push.
But the cutback in harbour capacity could undermine the financial viability of a fourth rail line in the region, which would potentially throw a lifeline to otherwise-stranded junior players.
As part of the port negotiations, which will also resolve the contentious “use it or lose it provisions” for the junior players and whether their leases will be transferable, the authority wants to require the NWI partners to relinquish their South West Creek space by as early as 2025 should BHP’s $22 billion outer harbour development get up.
They would then be expected to piggy-back off BHP’s project.
Mike Loly, project director for NWI, declined to comment yesterday other than to confirm talks were “ongoing”.
However, State Transport Minister Troy Buswell warned the port authority that the Government would not tolerate a cut in the NWI’s 50 million tonne annual allocation, and that he was keen to ensure junior miners had a seat at the lucrative iron ore export table.
“A reduction in capacity, and the enforcement of the relocation of the outer harbour clause, would make the NW Infrastructure project incredibly difficult to fund and therefore advance the project,” he said.
The South West Creek extension is also the site of Hancock Mining’s berth for its $10 billion Roy Hill mine, which will ship up to 55 million tonnes of iron ore a year from 2014.
Industry speculation has also centred on Andrew Forrest’s Fortescue Metals Group eyeing off some of the capacity at the NWI site.
Despite holding talks with the port recently, the authority is said to be baulking at the Government edict not to slash the NWI allocation.