Port needs refit to cope

ANOTHER $3 million to $10 million of taxpayers’ money could be spent to reconfigure the Geraldton Port, which recently underwent a $103 million upgrade, because it cannot cope with growing iron ore exports.

Meanwhile, the prospect of new iron ore mines, and downstream iron ore processing establishing in the region on the back of the port expansion and surging Chinese demand for iron ore, has parts of the industry looking at the controversial $192 million Oakajee port plan as one solution.

Mt Gibson Iron Ltd is the first company to start exporting iron ore from Geraldton Port. However, since its first shipment in February a number of issues including mineral contamination, congestion and expense have arisen at the port.

Mt Gibson shares berth four with other mineral exporters and it has been confirmed Rio Tinto’s Three Springs talc mine operator Luzenac Australia was forced to ship through Bunbury on at least one occasion because of mineral contamination.

Another iron ore company, Midwest Corporation, is having trouble negotiating sales contracts because of port congestion.

Mt Gibson’s ore shippers are reportedly warning about the cost of a $US1.50 per tonne Government surcharge to recoup the costs of the port expansion.

Planning and Infrastructure Minister Alannah MacTiernan said it was clear Geraldton port’s current structure would not be able to cope “all that well” and that the Government was looking at reconfiguring berth four.

She said the port had been upgraded to cater for a certain level of iron ore export but since then Mt Gibson had won more contracts and a raft of other projects were being developed.

“It is true our port has been more successful more quickly than was thought and so we may have to do some reconfiguration,” Ms MacTiernan said.

A business plan for a dedicated iron ore ship loading facility at the port is being put together.

Ms MacTiernan could not give a date for a decision on the facility but said it would need to be in place by the middle of next year.

Midwest Corporation CEO Stephen de Belle said the current port delays were frustrating.

He said there would be employment delays at the company’s Koolanooka project near Morawa if they continued.

Mr de Belle said he had been told it would be feasible to commence shipping from Koolanooka in October.

Midwest also recently received State support for the development of its Weld Range project and has plans to develop a four million tonne per annum to 5mtpa magnetite pellet project by mid 2007.

Mr de Belle said development at Weld Range, which could produce up to 5.5 million tonnes of ore a year, would require a rail link and a deep-water port.

He has recently been in discussions with Gindalbie Gold about the possibility of forming a relationship that could have them share infrastructure including a port and rail link.

Gindalbie controls the nearby Minjar iron project at Blue Hills iron ore province where they are currently targeting a 200 million tonne Mt Karara magnetite deposit.

Mr de Belle confirmed the two companies were looking at the Oakajee port development as part of this relationship.

Ms MacTiernan said the Government was aware of the renewed support for Oakajee but said it was not its intention to revisit the project with taxpayers’ money at the moment. She said with some additional but moderate investment, Geraldton Port would be able to cater to demand over the next five years, giving the Government the capacity to look at what might be needed in the longer term.

Mt Gibson chairman Bill Willis said the port had given the company an assurance it would fix the throughput problems associated with its loading infrastructure while the contamination issues were a separate concern.

However, Mr Willis also said the Oakajee proposal was not viable for a miner of Mt Gibson’s size.

Several attempts were made to contact Geraldton Port Authority CEO Peter George.