Would-be miners in WA’s Yilgarn region have gone public with their frustration over what they say is the slow progress of the Esperance Port expansion.
It’s not just that a lack of clarity over the project’s timetable makes it difficult for iron ore players to plan long term and secure project finance.
The danger, at least according to Yilgarn Iron Producers Association boss David Utting, is that the window of opportunity may not be maximised.
Industry views differ on just when the iron ore price will flatten out. But most players agree a plateau is inevitable; it’s just a question of when.
The State Government pledged its support for an expansion of Esperance Port earlier this year. The expansion is intended to take the port’s capacity from 11 million tonnes of iron ore a year to about 20mtpa and will likely cost about $240 million to $300 million.
YIPA has gone to great lengths to stress that Transport Minister Tory Buswell is not lacking in enthusiasm to get the project done. The problem, says YIPA, is that as they move down the chain of bureaucracy, the sense of urgency evaporates.
A market-sounding exercise kicked off this month but expectations are it’s unlikely a proponent will be tapped for the build before late 2012 or early 2013.
Publicly nobody is throwing around the O-word but The industry’s underlying fear is clear: nobody wants to see Esperance fall prey to the delays and uncertainty that have dogged the (much bigger and more expensive) Oakajee port and rail project.
The cost of delay is real and not just to would-be miners at a time of near record prices – YIPA claims delays will cost the State Government about $150 million a year in foregone royalties.
Why all the fuss?
That’s the question that some observers of the battle around Central Petroleum have been asking.
Before March this year the company, with its clutch of oil, gas and coal assets in central Australia, kept a low profile.
Then founding chief executive John Heugh was sacked, Queensland billionaire Clive Palmer appeared in the wings and it became the messiest resources stoush in town.
Both Central Petroleum’s new boss Richard Cottee — appointed to the board in the course of two back-to-back shareholder meetings on Friday — and the ousted Mr Heugh argue the group’s assets are such that it could become another Santos or Woodside Petroleum. That remains to be seen.
What should become clearer in the coming days or weeks is where Mr Palmer’s interests lie. If he wants control of the company and cannot achieve it by rolling the board the next logical step may be a takeover bid.
Alternately, if, as has been speculated but not confirmed by Mr Palmer, his interest lies in the group’s coal assets, the outcome could be quite different.
Mr Cottee made it clear after taking charge on Friday that he saw the coal assets as non-core and would be prepared to sell.
At this point in time the only certainty is that this stoush has further to run.