Extra export space flagged
A new battle for export space at Port Hedland is looming as port authorities edge closer to lifting the iron ore shipping capacity from the inner harbour.
The constrained shipping channel at Port Hedland is the major drag on exports from the port.
It is now capped at a theoretical limit of 495 million tonnes a year - a figure that puts a crimp on the expansion ambitions of Fortescue Metals Group, BHP Billiton and Gina Rinehart's Roy Hill project.
Speaking at the Mining the Pilbara conference yesterday, Pilbara Ports Authority chief executive Roger Johnston outlined a raft of measures aimed at pushing Port Hedland's iron ore capacity beyond 495 million tonnes a year, confirming the Port was modelling a new theoretical cap.
Mr Johnston, who is in charge of Port Hedland, Dampier and a swathe of other ports on the Pilbara coast, did not give a time frame for completion of the review and would not speculate on the new possible export limit.
But he gave a bullish overview on progress in the North West, saying Port Hedland had shipped 2 million tonnes in a day for the first time in April, and had run seven ships on a single tide in June, moving 1.3 million tonnes of ore.
He said the channel could now theoretically take a maximum of eight ships a tide.
The addition of additional escape channels in the shipping lane, to reduce the risk of a grounding blocking access, could allow up to 10 or more ships to move on a single tide.
The iron ore industry has long said Port Hedland's capacity could exceed 600 or 700 million tonnes a year.
But although a low iron ore price has put a clamp on big-spending expansion plans for most producers, the savings offered through volume production mean any formal move to lift capacity will likely trigger a battle between the Port's major users and emerging players for the right to extra tonnes.
BHP Billiton is pushing towards a 270 million tonne run rate but has a priority channel allocation of only 240mtpa.
Fortescue is already at 155mtpa, and has priority allocation of only 120mtpa.
Extra tonnages for both come from so-called "D class" allocations - shipping windows assigned if no priority vessel is queued up and ready to be loaded.
Roy Hill executives have previously said their project's 55mtpa allocation is the major restraint on any expansion of Mrs Rinehart's iron ore ambitions.
All three players would be keen to lock down any new capacity offered up and would be vying with the State's ore hopefuls and mid-tier players such as Atlas Iron and Mineral Resources, currently limited to about 25mtpa through the Utah Point Berth.
Atlas and Brockman Mining have also locked in 55mtpa of capacity through the yet-to-be-built North West Infrastructure berths.
