Anketell Point looms as next Pilbara port

Two major port developments in the Pilbara have moved closer to commencement, while the Oakajee port in the Mid West continues to languish.

WESTERN Australia’s next greenfields port project is likely to be at Anketell Point in the Pilbara, after the Department of State Development last week gave the nod for a 100 million tonnes per annum development.

The new port, near Dampier, is likely to proceed just ahead of BHP Billiton’s planned outer harbour development at Port Hedland.

There was progress on two fronts for the outer harbour development – BHP finalised an agreement with the state government on iron ore royalties, leading to changes to its state agreements, and the company negotiated a development plan with the Town of Port Hedland.

BHP Billiton Iron Ore president Ian Ashby said the changes to the state agreements would give the miner greater certainty in planning and executing growth projects, particularly the outer harbour development.

The company’s deal with the Town of Port Hedland, currently subject to a public consultation process, will pave the way for the construction of a camp for 6,000 construction workers.

Other elements of the plan include an upgrade of the airport, and the servicing of lots for industries outside of mining.

The town said the overall development plan would bring in $200 million of benefits to the area, according to independent economic modelling.

This figure will be dwarfed by the cost of the outer harbour development, speculated to cost upwards of $10 billion.

The outer harbour will allow BHP to expand its iron ore exports beyond 240mtpa, which is the company’s current capacity allocation in the inner harbour.

Fortescue Metals Group, which also exports from Port Hedland, is another miner that will run up against its capacity entitlement (155mtpa), assuming its current expansion projects run to plan.

That’s why it has been eyeing a new port development at Anketell Point. Aspiring iron ore miner Aquila Resources has been evaluating the same location for its planned West Pilbara project.

The two companies have been pitching competing development proposals to the state government, and it appears a compromise of sorts may have been reached.

The Department of State Development has endorsed changes to Aquila’s port development plan, which is targeting an initial capacity to 100mtpa (up from 70mtpa originally).

The new plan also realigns the port layout to address environmental concerns and to comply with the Dampier Port Authority’s master plan.

Within the 100mtpa total, Aquila wants to reserve 50mtpa for its own export needs.

The residual amount would be available to other exporters, most likely FMG but possibly other miners such as Atlas Iron, Flinders Mines or Iron Ore Holdings, all of which have project plans in the west Pilbara.

FMG has previously talked about exporting 100mtpa in its own right through Anketell Point, and had been pushing to be the lead proponent for the port development.

However, it may be satisfied with Aquila’s plan, which is far more advanced in the approvals process, especially if there is a clear pathway to expand the port’s capacity.

In an update to the market this week, Aquila said it expected the cost of the West Pilbara project (mine, rail and port) would increase beyond its most recent estimate of $5.8 billion.

“This is due to the ongoing general escalation of costs in the Pilbara region, in addition to the change in port scope,” the company said.  

It added that debt funding discussions with China Development Bank are continuing, along with financier, legal and technical due diligence.

“However the scope and timetable for development of the Anketell Point port requires resolution by the state and interested stakeholders,” the company said.

The proposed Anketell Point and Port Hedland developments are in addition to expansions Rio Tinto is proceeding with at its Dampier and Cape Lambert ports, where overall capacity will rise to 333mtpa.

The progress in the Pilbara contrasts with the delays experienced by the Oakajee project, which has been hit by cost increases and the inability of 50 per cent owner Murchison Metals to fund its share.

Premier Colin Barnett is aiming to get Chinese groups investing in the port project to support their planned iron ore mines in the Mid West.

Commenting on reports that China’s sovereign wealth fund, China Investment Corp, is reviewing the troubled project, Mr Barnett told ABC radio that he expected China would take a “fairly hardball position and I can understand that”.

 “I’m quite optimistic about this project (although) it is difficult,” Mr Barnett said.