Ore tax fears shroud port
Fresh concerns surround the Oakajee Port and Rail Project, amid fears a carbon tax could threaten the magnetite export industry.
The magnetite industry is seeking concessions from the Federal Government’s proposed carbon tax.
Oakajee’s foundation customers — Karara, Jack Hills and Koolanooka Blue Hills — are all magnetitehematite projects.
Geraldton Iron Ore Alliance chief executive Rob Jefferies said magnetite’s inclusion in a carbon tax would have a devastating impact on the Mid West.
“If you look at the total production of steel, magnetite requires 15 to 20 per cent less carbon emissions than steel manufactured from hematite ore,” he said.
“It’s the process of concentrating magnetite ore that requires a lot of energy and this process is conducted in Australia.
“Magnetite miners will need some concessions under the tax to be globally competitive.”
An estimated 13 billion tonnes of iron ore has been identified in the Mid West, the majority of which is magnetite.
Sinosteel Midwest’s Koolanooka Blue Hills mine, 160km south-east of Geraldton, has a potential magnetite resource of 488 million tonnes.
Sinosteel Midwest chief financial officer Brad Farrington said the miner supported the push for concessions from the carbon tax, but would not be impacted intitally.
“Because SMC’s nearterm projects are all hematite, SMC is not itself actively seeking concessions on carbon tax for magnetite production,” he said.
“SMC is aware of the work some of the other magnetite project participants are doing together and SMC supports that push for carbon tax concessions.”
Gindalbie Metals’ Karara project is expected to produce eight million tonnes of magnetite per annum as of late 2011.
Gindalbie refused to comment on the carbon tax until it knew what the impacts would be.
The Gillard Government is negotiating the details of a carbon tax, with a preliminary $20 a tonne carbon price signalled.
Oakajee Port and Rail, a joint venture between Murchison Metals and Mitsubishi, is watching the debate closely.
“OPR will monitor the carbon tax debate to understand any impacts it may have on Mid West miners and subsequently on the Oakajee development,” an OPR spokesperson said.
Premier Colin Barnett expressed frustrations about the nature of the carbon tax debate.
“We should be talking about whether a carbon tax will reduce carbon emissions in Australia,” he said.
“It’s about time policy debate got to the real issue.”
The Premier, an avid supporter of Oakajee, said a high price on carbon would deter the mineral processing sector: “If a carbon price is set too high it will have a discouraging effect on much of the resource processing industry.”
CLAIRE TYRRELL
