Miners to co-fund $225m Port Hedland upgrade

23/10/2007 - 14:05

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The State Government has approved a $225 million upgrade of Port Hedland's port facilities after securing up-front capital contributions from miners, including BHP Billiton, Consolidated Minerals and Atlas Iron, to cover nearly half the cost.

Miners to co-fund $225m Port Hedland upgrade

The State Government has approved a $225 million upgrade of Port Hedland's port facilities after securing up-front capital contributions from miners, including BHP Billiton, Consolidated Minerals and Atlas Iron, to cover nearly half the cost.

Planning and Infrastructure Minister Alannah MacTiernan said $105 million of the funding would be sourced from foundation customers by way of prepaid charges and capital contributions, which would be applied against capacity at the new berth.

She told WA Business News that BHP Billiton Ltd would make the largest contribution, since it would be able to use the upgraded facilities for a lay-by berth.

The contribution from each company is still being negotiated but WA Business News understands BHP has been asked to pay $78 million.

Other foundation customers would be diversified miner Consolidated Minerals Ltd, aspiring iron ore miners Atlas Iron Ltd and Aurox Resources Ltd, and Mineral Resourcs Ltd subsidiary Process Minerals International Pty Ltd, which mines manganese fines at ConsMins' Woodie Woodie mine.

"This suits the companies as well because they will get a more efficient port," the Minister said.

"The remaining $120 million will be sourced from port borrowings, which will be fully repaid with port user fees within ten years," she said.

Atlas Iron managing director David Flanagan welcomed the upgrade and the funding arrangement, which will result in Atlas making the second largest contribution.

"We were so convinced of the business case that Atlas was prepared to make an upfront contribution," he said.

 

 

The full text of an announcement from Planning and Infrastrucutre Minister Alannah MacTiernan is pasted below

Planning and Infrastructure Minister Alannah MacTiernan today announced that the State Government had approved the development of a new $225 million multi-user public berth at Port Hedland.

"Last year Port Hedland was Australia's second highest volume port with throughput of 111.9 million tonnes," Ms MacTiernan said.

"By 2010 throughput is expected to significantly exceed 200 million tonnes. The additional berth is essential for the port to cater for future trade growth."

"We are a trading State and we need to be expanding our port capacity to enable our economy to function competitively."

The new public berth will provide many benefits including:

  • Capacity to accommodate small Cape class vessels of up to 120,000 DWT;
  • Freeing up access on existing public berths and berthside land to facilitate an additional 1.2 million tonnes annually in new bulk, general cargo and container trade;
  • Providing access to export facilities for emerging iron ore juniors; and
  • Relocating manganese and chromite stockpiles away from the town, reducing health risks and improving amenity at the west end of the town.

Ms MacTiernan said that $105 million of the funding, to be sourced from foundation customers by way of prepaid charges and capital contributions, would be applied against capacity at the new berth.

"The remaining $120 million will be sourced from port borrowings, which will be fully repaid with port user fees within ten years," she said.

The port currently has three public berths. The No 3 berth was built in 1965 by Leslie Salt Company (now Dampier Salt Ltd) before it was transferred to the newly created port authority in 1970. In 2005 the Port Authority extended its No 1 Berth to recreate the No 2 Berth, which was demolished in 1976.

In January this year, the Government approved expenditure by the Port Hedland Port Authority of $9.5 million to undertake dredging and finalise conceptual planning of the berth, which forms part of the total development cost.

The new Berth, which will have an annual capacity of around 18 million tonnes, will be located at Utah Point on Finucane Island, on the western side of the harbour and is expected to be operational in the first half of 2009.

"The project will require the statutory environmental approvals and the Public Environmental Review will be submitted shortly," Ms MacTiernan said.

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