The ongoing drama surrounding high atmospheric levels of nickel and lead concentrates in Esperance could have been magnified if the company involved, Magellan Metals, had decided instead on Geraldton as its port of choice.
The ongoing drama surrounding high atmospheric levels of nickel and lead concentrates in Esperance could have been magnified if the company involved, Magellan Metals, had decided instead on Geraldton as its port of choice.
Geraldton Port Authority was originally in line as the preferred port to take Magellan Metals' lead concentrates, until the company made the decision in late 2004 to export out of Esperance instead.
According to Magellan Metals’ 2004 first quarter report, the company was in negotiations with government departments to seal a 182-kilometre stretch of unpaved road between Wiluna and Meekatharra, to transport lead concentrates from the mine site to the Geraldton port.
The report said haulage contracts for transporting the lead concentrates were also being negotiated, to be completed by the third quarter.
However, by the time the company released its end of financial year report, it had decided to export from Esperance – a decision the Esperance Port Authority had described as being ‘on the drawing board’ in its 2003-04 annual report.
Geraldton Port Authority chief executive officer Peter Klein said the decision to export from Esperance, rather than Geraldton, was made by Magellan Metals for economic reasons.
Specifically, he said, the overall costs of operation, transportation and storage were lower for the company to export from Esperance, despite the mine being closer to Geraldton.
“Esperance had better facilities to accommodate the trade, therefore Magellan made the call to go to Esperance,” Mr Klein said.
He said Magellan Metals also found the rail link between its mine, near Wiluna, and Esperance to be more convenient than transport by road to Geraldton, and that storage facilities at the Esperance port were also a consideration.
Geraldton did not have appropriate storage facilities for the company’s use at the time.
Alan De’Ath, chief executive officer of Magellan's parent company, Ivernia Inc, said the company had not engaged in any political lobbying during the process.
Magellan Metals managing director Pat Scott said he was not based with the company at the time, but that the decision was made through the usual regulatory channels.
The company’s first carbonate shipment to China left the Esperance port in early July 2005, although shipping has been suspended pending the investigation into lead contamination.
Mr Scott said last week that the company was considering a range of options, including changing the carbonate to a pellet form, rather than powder, and using an alternative port.
WA Business News understands that Magellan Metals previously tried lead carbonate pellets, but the pellets broke down under the influence of movement and moisture.