Chinese demand for WA iron ore is driving new developments.
A SECOND wave of iron ore development is underpinning billions of dollars in proposed new port facilities across Western Australia, as new players seek to tap into resurgent Chinese iron ore demand.
That renewed confidence was highlighted by the state government’s selection last week of Anketell Point on the Pilbara coast as the preferred site for WA’s next multi-billion dollar dedicated iron ore port.
The Anketell announcement coincided with a flurry of news around other major iron ore port proposals. Including the partly complete Cape Preston port in the Pilbara, these could ultimately increase the state’s iron ore export capacity by more than 750 million tonnes a year, all from new entrants.
The most significant single new proposal is the Anketell port, midway between Karratha and Cape Lambert, which could ultimately have a capacity of 350mtpa.
Approving the site last week, the state government pledged $3.5 million for preliminary work on an associated 1,400-hectare industrial estate, and said it hoped the facility would be operational by 2015.
Premier Colin Barnett described the move as “a big step forward to avoid what would have been inevitable major bottlenecks in our production”, given the strength of iron ore demand and the aggressive expansion plans of WA producers.
The Anketell proposal has largely been driven by Perth-based Aquila Resources as part of its $3 billion West Pilbara iron ore joint venture with private miner AMCI near Pannawonica.
The project, which would require a dedicated 275-kilometre railway, is expected to produce at least 30mt of iron ore annually. The joint venture has spent $145 million on mine and infrastructure studies so far, and last week said it hoped to have the project in production as early as 2013.
Last year, Fortescue Metals Group agreed to work with Aquila on the port plan after confirming a 2 billion tonne iron ore resource at its Solomon project, east of Wittenoom.
Fortescue is initially planning a 60mtpa mine at Solomon, but last week said it would be seeking a total capacity allocation of 240mtpa at Anketell port to cater for its future expansion needs in the western Pilbara region.
China Metallurgical Construction is expected to be the port’s third foundation customer, to export magnetite concentrate from its planned 15mtpa Cape Lambert magnetite development nearby.
Fortescue executive director Russell Scrimshaw said it was too early to determine the cost of the project, except that it would run into the billions of dollars.
Meanwhile at Port Hedland, the fledgling North West Iron Ore Alliance said preliminary studies confirmed the commerciality of a $2.1 billion multi-user iron ore berth at South West Creek, which it now hopes to commission in late 2013.
The alliance, which represents emerging miners Atlas Iron, Brockman Resources and FerrAus, has secured a capacity allocation of 50mtpa for the facility in Port Hedland’s congested inner harbour, next to Hancock Prospecting’s planned 55mtpa Stanley Point wharf which will service its proposed Roy Hill iron ore mine.
Last week, the alliance won the right to collectively negotiate for access to the existing rail networks of BHP and Fortescue, giving its members greater clout in talks needed to avoid additional rail investment that could undermine the viability of some projects.
While bankable studies for SW Creek can now get under way, Port Hedland Port Authority chief Andre Bush confirmed to WA Business News that the nearby $225 million Utah Point multi-user wharf was on track for completion in late October.
The 18mtpa facility is largely aimed at providing export facilities for smaller scale iron ore projects, such as Atlas Iron’s Pardoo mine, and manganese producers who currently export from the general use wharf at the port.
The proposed $4 billion Oakajee deepwater port near Geraldton also returned to the spotlight, with state development director general Anne Nolan telling a parliamentary committee that the department had identified 105 potential users in the Mid West region. Ms Nolan said the port could ultimately export at least 110mtpa, or three times more than its planned initial capacity.
One potential user, unlisted newcomer Cashmere Iron, this week confirmed initial magnetite and hematite resources of more than 1 billion tonnes at its Cashmere Downs project, 100km south of Sandstone.
The company, which plans to float in the September quarter, said it was “highly supportive” of the Oakajee port due to come onstream in 2014.
Former BHP Billiton chief Brian Gilbertson’s return to WA through aspiring Yilgarn iron ore miner Jupiter Mines has also sparked plans for major upgrade of iron ore export capacity at Esperance.
With the backing of Mr Gilbertson’s Pallinghurst consortium, Jupiter chairman Geoff Wedlock said it may be possible for stranded iron ore projects in the Yilgarn region to work together to boost a fourfold increase in Esperance’s capacity to 25mtpa.
