WA regional ports’ executive management and their boards are overseeing major expansions, planning for trade in new commodities, and negotiating rural industry setbacks. Susan Bower reports.
THE State’s eight port authorities operate in vastly different environments, but have one thing in common – none is treading water.
Some port authorities are swimming against the tide, pulled in undesired directions by adverse climatic condi-tions, while others are steering their way through financial and regulatory processes to secure upgrade funding. Still others are braving huge swells of regional expansion.
Several are expecting new local industries to boost profit within the next few years. Esperance has recently spent $62 million on land reclamation, new berthing, storage and handling facilities.
This followed Cooperative Bulk Handling’s $68 million upgrade of grain handling facilities at the port in 2000.
Major client Portman Mining is covering $35 million of the latest debt through a take and pay contract, and infrastructure fees.
Hence, the Esperance Port Authority is hoping Portman will get the go ahead to mine its northern Koolya-nobbing tenements.
If not, this will affect profitability forecasts for the authority, already affected by a drop in grain exports because of drought.
Grains, the second largest export group out of Esperance, were down in the most recent harvest to only one third of the previous year.
Last financial year was a particularly good year for Esperance Port, and the new-look board, led by chairman Richard Nulsen – a director for 12 years – has a reputation to protect.
The Esperance Port Authority achieved net profit of $2.19 million to June 30 2002, up 52.19 per cent on the previous year.
Iron ore exports, up 64 per cent, exceeded 4,000,000 tonnes for the first time and there was strong growth in nickel concentrates from Mt Keith, Cosmos, Black Swan and Emily Ann.
The port also bettered a 6 per cent government rate-of-return target by more than 2 per cent.
Growth in nickel exports is expected to continue, with explorer Western Areas making some good regional finds and BHP Billiton expected to make a positive final decision on its proposed nickel mining operation at Ravensthorpe later this year.
This would mean further expansion of storage and handling facilities at the port, long-time CEO Colin Stewart said.
WA’s two main wheat ports, Geraldton and Albany, both posted losses last financial year, as did Broome, the State’s newest port authority, and one operating in arguably the most difficult set of circumstances for any port in the nation.
Although traffic is at the smaller end of the scale, Broome is nonetheless perhaps the busiest port in WA, new Broome PA chairman Ian Burston said.
The port takes delivery of most of the fuel needs of the Kimberley region and is a base for naval patrol operations.
It now also is hosting cruise ships, in addition to local marine tourism.
This is apart from the normal fishing and pearling trade, regional livestock exports and significant servicing operations, from which the port earns most of its revenue.
The port receives 200 trading vessels annually, but services 1300 vessels operating within the region.
Cash flows are positive, but the two-year old Broome Port Authority is running at a loss, with much of the trade and activity seasonal, and all local industry affected by a long wet season.
Tides that vary by an average eight metres, and safety considerations that quarantine the cram-med and limited berthing facilities while a fuelling vessel is being unloaded, further restrict port operations.
Nonetheless, port trade has doubled in the past five years and Broome’s growth is five times the average WA rate.
There has been a significant increase in demand from petroleum exploration activity in the Browse Basin in the past three years, Broome Port Authority CEO Stefan Frodsham said.
Activity is continuing to accelerate with five wells planned this year by one international company.
Finds in the Browse Basin thus far exceed the quantity of known reserves, which underpinned first development of the North West Shelf venture, and the Broome authority is acutely aware it is ideally positioned to service potential significant development of the Browse region.
Hence the authority has put a case to both the State and Federal governments for funding to extend facilities.
A response is expected within three months.
Geraldton Port Authority is hoping for much better years than last financial year, with a $100 million port expansion under way and an $88 million proposed rail access development.
A total $250 million of development around Geraldton, including access roads, would add significantly to port operations in coming years, Geraldton Port Authority’s John Durant said.
Mt Gibson Iron is expected to be exporting out of the port from October, and possible oil and gas developments in the Perth Basin could offer further business.
Current trade was three times what it was 20 years ago, Mr Durant said.
“We’ve come of age, to do real effective business now,” he said.
The world’s largest alumina export port, Bunbury, is also set for significant transformation, with containerisation expected by mid-2004, Bunbury Port Authority CEO Dom Figliomeni told WA Business News.
This will be worth up to $7 million in annual trade, he said.
Ahead of an economic impact study to be completed by May, Mr Figliomeni said containerisation at Bunbury would defer the need for overload facilities at Kwinana, and take 20,000 trucks off the road.
“Industry will look at the South West as a viable option,” he said.
Bunbury Port Authority business will also be up, with a woodchip mill at the port before the end of this year.
In the past year both the chair-man and CEO of the Dampier Port Authority have resigned. The port – virtually set up by Woodside and Hamersley Iron, who own the major export facilities – posted a $198,000 loss for the 2001-02 financial year.
This was largely due to extraordinary items and a substantial write-down, acting CEO Rob Vitenbergs said.
Port communications were restructured, and the authority’s annual report also mentioned a cargo wharf maintenance program as “unbudgeted”.
WA handles more than 200 million tonnes of trade each year and the responsibilities on chief executive officers and other executive management are significant.
Dampier is expecting a new CEO by May, and Albany’s Bob Emery has been in the job only six months after the retirement of Brad Williamson last June.
Albany also posted a loss last financial year, and as the port was reliant on grains trade, the next two years would also be “tight”, Albany Port Authority finance manager Colin Berry said.
But, as with Bunbury, woodchip operations were expected to boost future income.
An annual 1,000,000t of woodchips were expected to be leaving port by 2007.
Port Hedland, by contrast, had a particularly good year last year, and is expecting mining developments to continue to underpin a bright outlook.
BHP Billiton Iron Ore is expanding its port operations and anticipates exports of 90 million tonnes annually out of Port Hedland by 2007.
Hope Downs has scheduled 2006 for first iron ore exports, and is talking 25 million tonnes per year by 2010.
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