I support Anketell: Barnett
Premier Colin Barnett says he still supports the development of a multibillion-dollar iron ore project in the West Pilbara, despite threatening to withhold support for further expansions by BHP Billiton and Rio Tinto.
Mr Barnett told _WestBusiness _he still supported the development of the Anketell port and rail project by a consortium led by Baosteel, China's biggest steelmaker, which could allow the export of hundreds of millions of tonnes of iron ore from an undeveloped Pilbara iron ore province.
He issued a warning to BHP and Rio Tinto on Friday that he may block further expansions to their WA operations, which Mr Barnett blames for depressing global iron ore prices and putting a major dent in WA royalty receipts.
Baosteel acquired the West Pilbara iron ore project through the $1.4 billion takeover of Aquila Resources last year. Along with its partners - Korea's POSCO, Hans Mende's AMCI and haulage provider Aurizon Holdings -- Baosteel plans to make a final investment decision on development of a 40 million tonne operation by early next year. If approved it could be delivering iron ore into markets by late 2018, when BHP and Rio could also have hit peak export rates of 290mtpa and 360mtpa respectively.
Analysts are now projecting the iron ore price glut will depress prices well into 2017 and beyond, and the Anketell port was originally conceived as having a capacity of up to 350mtpa. It was widely seen as a way to break the infrastructure stranglehold of the Pilbara's big three exporters.
Aurizon wants to build and operate the port and the 400km rail line needed for the project. The company confirmed on Friday it delivered its partners its first assessment of likely haulage charges for the project in late March, and had been given the go-ahead to continue work on its feasibility studies.
That would include negotiation of a State Agreement for the rail line, and Mr Barnett said he would not stand in the project's way. "I support the project and I do support the negotiation of a State Agreement," he said.
"It is important to note that this is a medium-term project for future growth that we would not expect to come on stream for some time so its progression is not having an impact on the iron ore price now."
It is understood Baosteel is still spending money unabated to complete mine feasibility studies. An Aurizon spokesman said on Friday its work was continuing, although the company was keeping a close eye on the challenges in the iron ore markets.
