The Western Australian (WA) government has granted mining firm BHP approval to export up to 330mn t/yr of iron ore through Port Hedland, but the battle is on with other port users to secure enough channel capacity to match expansion plans.
The WA government approval increases BHP's export potential from its previous licence of 290mn t/yr and gives it more flexibility to meet its medium-term target of 310mn t/yr, but it is only useful to the firm if it is matched by a similar channel allocation by the Pilbara Ports Authority (PPA), which operates Port Hedland.
The PPA is balancing ambitious growth plans from its five major iron ore exporters, as well as from those exporting manganese, salt, and lithium and copper concentrates. The WA state government expanded the maximum capacity of Port Hedland by 7pc to 617mn t/yr in October 2019, but the combined plans of iron ore exporters BHP, Fortescue, Roy Hill, Atlas Iron, and Mineral Resources (MinRes) demand around 670mn t/yr capacity (see table below).
This has led to lobbying by all users to demand fair allocation of channel capacity, which is a major bottleneck for the port. An outer harbour at Port Hedland, which would remove pressure on the channel, has been suggested several times over the past 20 years, but it would cost around $10bn and may be rendered unnecessary if a medium- to long-term decline in demand for WA iron ore eventuates.
BHP, Fortescue and Roy Hill dominate Port Hedland at present, but WA independent MinRes,...
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