Ken Court left behind his chance to add large-scale steelmaking to Western Australia's repertoire in the late 1990s, but the enthusiasm for the Mid West story is still evident as he mulls over his attempt to create a value-adding resources empire.
Ken Court left behind his chance to add large-scale steelmaking to Western Australia's repertoire in the late 1990s, but the enthusiasm for the Mid West story is still evident as he mulls over his attempt to create a value-adding resources empire.
"I would love to be sitting in Sinosteel now," Mr Court said.
"They are controlling resources that will replace a lot of capacity in China.
"Time will tell whether they do that."
Mr Court is referring to China-based Sinosteel, the major shareholder of Midwest Corporation Ltd, the current incarnation of a corporate entity that started life as Kingstream Resources Ltd and became the flagship independent iron ore hopeful of WA, presided over by Mr Court as chairman.
In its heyday in the late 1990s, Taiwan-based Kingstream was planning to build a plant capable of producing several million tonnes of slab steel a year, fed by Mid West iron ore mines and shipped out through a new deep water port at Oakajee.
The company, which had its WA headquarters in several floors atop the BankWest tower, was seen as the great hope for the ailing region around Geraldton, where farming had become increasingly volatile.
But the stars never quite aligned. There was considerable opposition to the port, the Asian financial crisis rocked Kingstream's financial support base and, with iron ore prices hovering at less than one quarter of current values, investors lost interest.
By early this decade the dream was over. Kingstream was dismembered, with its mining assets ending up with three different groups - Midwest, Murchison Metals Ltd and Mount Gibson Iron Ltd.
Fast forward to 2008 and those companies are now collectively worth billions, backed by Chinese and Japanese money, and the port is set to go ahead, adding to the capacity of the region to take advantage of historic highs in ore prices.
Mr Court believes the intellectual property held by Midwest, including $150 million in development planning, for plant using both direct-reduced iron and electric-arc technology, are as valid today as they ever were - despite the intervening failure of BHP Billiton Ltd's hot-briquetted iron plant near Port Hedland.
"It is not competitive to build a steel plant in the Pilbara," Mr Court said.
"Everything done at Geraldton is really done at prices comparative with Perth."
In addition to better labour prices and availability in the region, access to gas in the Mid West - then cheaper than it is now - was also a strong point in the convergence between raw materials and people.
Mr Court said the same plans that underpinned Kingstream's desire were valid today.
"They showed it would be the lowest cost steel producer in the world," he said.
He added that, in some ways, the equation was improved by the current argument over emissions, with a plant in Geraldton likely to be much cleaner than one in China.
There is also the opportunity for additional industry, basic steel products such as nuts and bolts, to start up alongside a steel plant - none of which he believes Chinese investors such as Sinosteel care to have operating in their countries - just as the Taiwanese were happy to have slab steel produced in WA as a raw material for their more complex manufacturing operations.
"Everything comes together in the Mid West for that to occur," Mr Court said.
"It's up to the owners if they want to rip the stuff out and send it to China or do it more cost effectively here."
Of course, another element that has changed is the dissection of Kingstream, which leaves a diverse and often conflicting set of stakeholders in the Mid West iron ore scene.
Sinosteel dominates Midwest with a 55 per cent stake, and has seen off a merger bid from Murchison. Murchison and Japanese giant Mitsubishi have a joint venture, which recently won the right to build the Oakajee port.
Looking back at the demise of Kingstream, Mr Court believes there were a few reasons the project ultimately failed.
One big issue was the decision to shift from a small-scale plant in Geraldton using the existing port infrastructure, which Mr Court said was prompted by a push to build Oakajee from the state government, run at that time by his brother, Richard, with the current member for Cottesloe Colin Barnett as state resources minister.
By adding a new port at the start-up phase, Kingstream changed its plan, opting to build a bigger plant in the industrial area proposed near the new port infrastructure.
"Colin Barnett wanted Oakajee," Mr Court said.
"We agreed with that in the longer term, but that increased the cost and size of the plant.
"In retrospect we should have stuck with the [original] concept.
"It would have gone ahead."
But the change to a more costly plan ran into trouble when the 1997 Asian financial crisis hit the steel price and crippled the project's backing by Taiwanese steel producer, An Feng.
That in turn coincided with a dry period for minerals investment in WA, stretching through until 2003 when the current boom got under way, just over a year after the administrators were appointed in late November 2001.
"It's interesting," Mr Court said. "Only a few dollars would have kept it going."
