BHP Billiton and Fortescue Metals Group appear set for moves to stretch the nominal shipping capacity at Port Hedland, believing the official 495 million tonne limit can be pushed up.
Until last year BHP had said it was reliant on the $20 billion outer harbour development to get past its 240mtpa shipping allocation. But outgoing BHP chief executive Marius Kloppers told analysts last week that adding a fifth car dumper at Port Hedland had lifted its infrastructure capacity to 300mtpa, well above that.
"In due course we look forward to approving what could be one of the lowest capital cost expansion opportunities in the industry as we add mining capacity to match that logistics chain," he said.
With only 239mt of iron ore leaving Port Hedland last financial year, the capacity of its shipping channel limit won't be tested until at least 2015, when Gina Rinehart's Roy Hill mine will begin shipping from its 55mtpa allocation. The Atlas Iron-dominated Utah Point berth is rated for about 17mtpa, and smaller players, including Atlas and Brockman Mining, have a 50mtpa allocation that could also come into play in coming years, tightening the screws further.
Until 2015, the port's two biggest players will be largely constrained their mine production, not the shipping channel. Beyond that, both could stake a claim for increased shipping from unused ship movements of other players under new rules introduced last year.
Fortescue chief executive Nev Power said last week that construction of its fifth berth at Port Hedland had been approved and would begin near the end of the financial year. He again flagged plans to add "incremental tonnes" to push past Fortescue's 155mtpa export target. With major debt repayments due in 2015, the company will be keen to move as much ore to market as possible.
With some analysts saying Fortescue's fifth berth could increase its infrastructure capacity to as much as 170mtpa to 180mtpa - the pair could lay claim to more than 95 per cent of Port Hedland's theoretical maximum capacity before other players are ready to enter.
Mr Power said he has little doubt Port Hedland could handle well above 500mtpa, however.
"Over the last few months we've had at least two tides at Port Hedland with more than a million tonnes on each tide, and there's also been a number of other occasions where there has been six ships on a tide - had those ships been larger ships than the smaller capesize, they would have been over a million tonnes as well," he said.
"With 700-and-something odd tides a year, that provides well in excess of 700mt a year - discount that for cyclones, weather, neap tides and the rest of it, you'd have to say the capacity is well north of 600mtpa.
"We think there's great opportunity to expand Port Hedland."