01/10/2008 - 22:00

Pressure on in the Pilbara

01/10/2008 - 22:00

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THE expansion of existing iron ore projects, and the commissioning of new mines, is expected to increase pressure on the Pilbara's already squeezed port and rail infrastructure.

THE expansion of existing iron ore projects, and the commissioning of new mines, is expected to increase pressure on the Pilbara's already squeezed port and rail infrastructure.

While iron ore giants Rio Tinto and BHP Billiton look to ramp up production through their expansion operations, projects by emerging junior miners such as Atlas Iron and Brockman Resources are expected to come online in the next 12-18 months.

Expansion projects at some of the region's ports are either being planned or are already under way.

At Port Hedland, BHP Billiton Iron Ore is set to increase capacity after securing an agreement with the state government late last month.

BHP will look to increase its capacity at the port to a total of 240 million tonnes per annum through the inner harbour to cater for its Rapid Growth Projects 5 and 6, up from the current approved capacity of 155mtpa.

In a landmark decision last month, former infrastructure minister Alannah MacTiernan confirmed the reservation of two new multi-user berths in Port Hedland's inner harbour, which are yet to be built, for North West Iron Ore Alliance and other potential junior producers.

With the berths potentially in operation as early as 2012, collectively the alliance would deliver 50mtpa of iron ore by 2014.

The development of an outer harbour facility at Port Hedland, which is seen as a necessity for BHP's iron ore expansion plans, is currently in prefeasibility mode.

Work is well under way on Rio Tinto's $US925 million Cape Lambert port expansion - from 55mtpa to 80mtpa - and is scheduled for completion at the end of 2008.

A feasibility study into expanding Pilbara capacity to 320mtpa by 2012 is well advanced, with a decision expected in early 2009.

RTIO has identified Cape Lambert as the preferred site for port expansion as part of its Pilbara capacity upgrade.

During the year, RTIO completed the phase B upgrade of the Dampier port, which is now ramping up towards its new capacity of 140mtpa.

Third-party access to infrastructure still remains a contentious issue.

Last week, a decision handed down by the High Court ruled BHP Billiton's Mt Newman and Goldsworth railway lines were not part of the production process, paving the way for junior miners to negotiate access to the railway lines.

The decision was made in relation to an application by Fortescue Metals Group for access to part of the rail lines, with the High Court decision representing a unanimous dismissal of BHP's appeal against the declaration of the railway lines as a service.

In August, FMG signed a third-party access agreement of its own, providing iron ore producer Atlas Iron access to its port facilities from December.

In the Mid West, the $2 billion Oakajee port is expected to be operational by 2012, and will alleviate pressure on the busy Geraldton port, which is near capacity.

While the capacity of the new facility hasn't been confirmed, it is understood that the port will be built with the capacity to export 35mtpa.

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