The debate over rail and port infrastructure in the Mid West hotted-up today, with Yilgarn Infrastructure providing details of its rail project and the state government calling for more data from the industry before committing to further port upgrades.
The debate over rail and port infrastructure in the Mid West hotted-up today, with Yilgarn Infrastructure providing details of its rail project and the state government calling for more data from the industry before committing to further port upgrades.
The news on the infrastructure front coincided with a spike in the share price of junior miners Murchison Metals and Midwest Corporation, which are developing plans for their own railway to their mines at Jack Hills and Weld Range.
Murchison said in December that the only viable route for a rail line was its so-called northern option, which had a capital cost of $530 million.
It said the alternative southern route was much longer (683 kilometres) and would cost twice as much to build and be more expensive to operate.
Yilgarn has challenged those conclusions, stating that its preferred southern route was 465 kilometres long, or possibly 495 kilometres if it was adjusted to accommodate the proposed $2 billion SKA radio telescope.
Yilgarn director Derek Bone told a Mining Club breakfast this morning his group was aiming to develop true multi-user infrastructure that could be used by all miners in the region.
He did not provide a cost estimate for the rail line, however Yilgarn has previously stated that the cost of its rail line and a new deepwater port at Oakajee would be about $2 billion.
Mr Bone said the length of the rail line was one of only five factors that would determine freight charges.
He also told the breakfast there was a big difference between a true multi-user rail system as opposed to a point-to-point rail system with open access.
In addition, Mr Bone said Yilgarn was "backing away" from plans to extend its rail network to mines south of Geraldton, such as Gindalbie Metals' proposed Karara mine.
He said the use of slurry pipelines was firming as the preferred transport option for these mines.
Meanwhile, Planning and Infrastructure Minister Alannah MacTiernan said today the Geraldton Port Authority had commenced detailed studies on new rail and unloading facilities to support the expected growth in iron ore exports.
The port authority has already commenced upgrades of one of its berths and is installing a new shiploader, but has been criticised for failing to upgrade the support infrastructure at the same time.
Mount Gibson Iron, which is currently the major iron ore exporter through the port, said last week its operations had been disrupted by port bottlenecks.
The Minister said the government was very aware that additional infrastructure would be needed to support the forecast increase in exports from 5.5 million tonnes in 2006-07 to 13.2 million tonnes in 2010-11.
"However, to support the business case for new facilities, the Port is asking mining companies to guarantee their tonnage forecasts with take or pay contracts," the Minister said.
"The State Government will not be racing to commit public funds without the appropriate commitments from users."
This is unlikely to satisfy Mount Gibson managing director Luke Tonkin, who said last week he would prefer incremental expansions of port infrastructure.
Other miners are currently trucking their ore and plan to switch to rail.
The Minister's statement is pasted below:
Geraldton port's new iron ore berth upgrade underway
An upgrade of Geraldton Port's berth 5 to cater for the needs of Mid-West iron ore exporters is on track for completion later this year.
Planning and Infrastructure Minister Alannah MacTiernan said that since September last year, the Geraldton Port Authority had awarded contracts totalling $18.5 million to advance the project.
These included
- $8.3million for modifications to berth 5
- $5.6million for a new ship loader with a capacity of 5,000 tonnes per hour,
- Numerous smaller procurement contracts.
"Geraldton's iron ore facility at berth 4 is in use 80 per cent of the time, so a new berth will speed ship turnarounds and save costs for exporters and purchasers," Ms MacTiernan said.
"Shipments from berth 5 should begin later this year.
"Miners forecast their annual production of hematite to grow from 5.5million tonnes per annum in 2006-2007 to 13.2million tonnes per annum in 2010-2011, with at least four iron mining companies - Mount Gibson Iron, Midwest Corporation, Gindalbie Metals and Murchison Metals - using the port.
"We are very aware that this level of production would also require improved rail and unloading facilities and increased storage at the port, so the Port Authority has initiated detailed studies of these needs.
"However, to support the business case for new facilities, the Port is asking mining companies to guarantee their tonnage forecasts with take or pay contracts.
"The State Government will not hurry to commit public funds without the appropriate commitments from users."
Local MLA Shane Hill said Geraldton and the Mid-West were continuing to benefit from Labor's massive investment in expanding Geraldton Port and building the Southern Transport Corridor.
"This is just the latest bit of good news that is helping ensure more jobs and business opportunities and new investment throughout our region," Mr Hill said.
