A report backed by the Pilbara’s big miners has found that iron ore exports are expected to grow modestly over the coming decade, well below the extra port capacity the miners themselves are seeking.
The report, commissioned by the Port Hedland Industries Council, said iron ore exports through the port are expected to increase by just 4.4 per cent, from 524mt in the current financial year to a peak of 547mt in 2022-23.
It said exports will average 545mt over the rest of the decade to 2029.
The report was based on forward guidance provided by BHP, Fortescue Metals Group and Roy Hill Holdings, which dominate shipments from Port Hedland.
In contrast to the guidance, the three big miners have applied to the state government for capacity increases that would take shipments to a collective 600mt.
Added to that would be annual shipments from Mineral Resources and Atlas Iron, of at least 10mt.
The capacity applications are likely to include a buffer that gives each of the miners flexibility in their operations.
Nonetheless, the big gap between the forward guidance and the capacity applications suggests growth may not be as strong as had been anticipated.
BHP expects to ship 286mt in the current financial year, just below its nominated capacity of 290mt.
It is believed to have applied for an increase in shipping capacity to 330mt.
Fortescue is on track to ship at least 175mt this year, in line with its capacity, and is looking to increase that to 210mt.
That would allow Fortescue to increase slightly volumes from its hematite mines and ship an incremental 22mtpa of magnetite product from its Iron Bridge mine, currently under construction.
Roy Hill wants to increase its capacity from 55mt to 60mt.
Mineral Resources is expected to ship about 6.5mt this year but is hoping to build a new export berth at South West Creek, which would give it substantially more capacity.
The report is much more bullish on the volume of spodumene (aka lithium) exports through Port Hedland.
Exports are projected to increase from 180,000 tonnes this year to 1.5mt in 2022 and slightly more beyond that.
Once again, that is based on forward guidance from participating miners, which include Pilbara Minerals and Mineral Resources.
The report, prepared by ACIL Allen Consulting, also included input from the Pilbara Ports Authority, Rio Tinto (salt) and Sandfire Resources (copper).
It does not include iron ore shipments from the Pilbara’s largest miner, Rio Tinto, as Rio exports through ports at Dampier and Cape Lambert.
Overall, the report estimated the port of Port Hedland and its supply chain pumped $54.7 billion into WA’s economy in 2018-19 and supported one in every 12 jobs throughout the state.
It found the economic value of the port and its supply chain was even more significant in the town of Port Hedland.
They contributed $1.1 billion to the town’s economy in 2018-19, creating 3,581 direct and indirect full-time jobs — 44per cent of all jobs in Port Hedland in the year — and paid almost $500 million in wages and salaries to resident workers.
The report has been released two months after BHP said it planned to spend up to $300 million over five years to improve air quality and reduce dust emissions across its Pilbara operations.
Dust management has been a major environmental and health issue in Port Hedland over the past decade.
It has led to calls for BHP’s port operations to be curtailed, as some of its ore stockpiles are located very close to houses and commercial premises.
The state government has imposed limits on new property developments in Hedland’s historic west end, which is most affected.
BHP said the new spending was on top of $400 million in projects already delivered over the past decade to minimise dust emissions across its supply chain.
