Esperance port has become an unwitting pawn in the bitter stoush between the Barnett Government and billionaire Len Buckeridge over his proposed James Point Port south of Fremantle.
The Esperance Ports Sea and Land authority finished its market-sounding exercise this week for a possible expansion for iron ore miners in the Yilgarn region, which could undermine the export tonnages and thus the financial case for Mr Buckeridge's land-backed Cockburn Sound site.
It will add further complexity to the Barnett Government's delicate negotiations with the tycoon over a deal he signed with the Court government in 2000 to build a bulk commodity terminal and related container port.
_West Business _reported yesterday that Mr Buckeridge has walked from the agreement but is suing taxpayers for up to $1 billion in damages for delays in approving the development.
Separately, a report detailing the viability of an iron-ore backed expansion at Esperance is understood to have been handed to the Esperance authority's board, and Government is considering funding the next stage of the process - a formal request for proposals.
The port declined to comment yesterday, but sources close to the process say that it revealed that claims by some junior miners in the region about how much ore they could export did not stack up.
This makes it unlikely that there is enough volume to share between Esperance and any - albeit remote - expansion at Fremantle.
The Chris Ellison-run Mineral Resources and Chris Corrigan's Qube Logistics are frontrunners for a major role in any Esperance expansion, sources say.
Mineral Resources and Indian power giant Lanco Infratech are already exporting iron ore and coal from State-run Fremantle Ports' bulk jetty in Kwinana, which is next to Mr Buckeridge's proposed bulk terminal.
Mr Buckeridge told _WestBusiness _yesterday that he was happy to negotiate a new deal on a bulk port only, but it would mean the rival Fremantle Ports shifting its operations at Kwinana further south to Naval Base in Rockingham so Mr Buckeridge's operation could benefit from a concentration of bulk commodity exports in the one area.
The Government may be reluctant to concede this point, given it has spent million upgrading Fremantle Ports' operations, and it would effectively hand Mr Buckeridge a monopoly.