THE WEST AUSTRALIAN
Thursday, 31 January 2013 14:19
The State Government has given the green light to the long-awaited expansion of the Esperance port to handle an expected surge in iron ore exports from aspiring miners in the Yilgarn region east of Perth.
Transport Minister Troy Buswell said the State Government had accepted an Esperance Port Authority recommendation to start the process of identifying a private sector consortium to design, finance, construct and operate a multi-user iron ore facility at Esperance.
The move will give a host of iron ore explorers the confidence to move forward with plans to expand and develop their projects.
The news follows reports in WestBusiness that the delay in expanding the port was costing $95 million a year in lost royalty payments to the State Government.
The Yilgarn Iron Ore Producers Association, which includes Mineral Resources, Cliffs Natural Resources, Cazaly Resources, Buxton Resources and Mindax, estimated a 10mtpa expansion of capacity at Esperance could boost the WA economy by as much as $627 million annually and create more than 3200 jobs.
The delay in approval has effectively hamstrung some Yilgarn miners through the shortage of port space across WA.
Cazaly Resources, which is developing the Parker Range iron ore project near Marvel Loch, welcomed Mr Buswell’s announcement.
Joint managing director Clive Jones said the company had been waiting for some time for a viable Esperance port solution so it could ramp-up Parker Range to development.
“While we’ve been waiting for the State Government to make a clear decision on Esperance, we’ve had to investigate other export options,” he said.
“Esperance remains our preferred port solution, but if Esperance isn’t developed in time, we may have to look elsewhere.”
Mr Jones said miners and investors needed certainty and transparency in the port development process and did not want any further delays caused by government indecision or bureaucratic confusion.
Mr Buswell today invited potential proponents to apply for pre-qualification to a Request for Proposal process.
"Following this initial step, potential proponents will be shortlisted and invited to participate in an RFP process," he said.
It is expected the preferred proponent would be identified later this year.
"All project funding and associated costs will be the responsibility of the private sector proponent ultimately selected through the RFP process," Mr Buswell said.
The size of the new facility would be determined by the proponent building the new infrastructure after entering into contracts with miners.
Recent estimates by the Esperance Port Authority indicate it may be commercially viable to develop a facility for an additional 10-12 million tonnes per year.
The port already has an operating licence to handle 11.5 million tonnes a year.
"Today's decision will facilitate growth of the Yilgarn region's iron ore sector," Mr Buswell said.
"Investors interviewed during market sounding considered the Yilgarn region to have reasonable prospects of generating additional financially viable iron ore projects which are required to support investment in the new facility."
The market sounding exercise also confirmed previous industry studies that iron ore production in the Yilgarn could grow significantly in the next 10-15 years.
The facility will be designed to allow for further expansion as required.
Interested parties have until 1 March to register their interest.
Pic: An aerial view of Esperance port in WA.
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