Aurizon Deal Could Solve Pilbara Infrastructure Woes

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Wednesday, September 17th, 2014
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Australian rail freight giant Aurizon has clinched exclusive rights to the port and rail development for a major Pilbara iron ore project, a deal which could help resolve the fraught nature of infrastructure access in the mineral-rich region as a whole.

The Infrastructure Framework Agreement (IFA) executed by Aurizon with the backers of the West Pilbara Iron Ore Project promises to see the construction of a new railway network in the Pilbara to facilitate the transportation and delivery of the development’s output.

Under the infrastructure agreement, Aurizon has until January 2016 to produce a commercially viable plan for the Anketell port, as well as 280 kilometres of rail line connecting the port to the iron ore development, with first exports scheduled to commence as early as 2017.

While the initial phase of the project is intended to convey at least 40 million tonnes per annum of throughput from eight mining areas, it could also be dramatically expanded in future to accommodate additional tonnage from other miners in a region which has been subject to ongoing disputes over access to transportation infrastructure.

Western Australian resource magnates Clive Palmer and Kerry Stokes have recently fought over access to port and rail infrastructure, as have iron ore giant Fortescue Metals and upcoming company Brockman Mining.

BHP Billiton felt its iron ore operations in the Pilbara were so threatened by a strike launched by tugboat workers at Port Hedland, it threatened to resort to national interest laws to stymie union action.

The Aurizon deal could radically upgrade transportation infrastructure in the region and help ameliorate these disputes, with the most critical project on the table being the development of the Anketell port as an alternative to Port Hedland.

Port Hedland is one of the biggest iron ore loading ports in the world and the largest in Australia, achieving the highest bulk cargo throughout in the country in 2011 at 199,002, 079 tonnes.

According to the Western Australian government, a port developed on greenfields land at Anketell, located around 30 kilometres east of Karratha in the Pilbara, had a potential export capacity of in excess of 350 million tonnes a year.

This would be more than twice the total exports passing through nearby Dampier Port, as well as 20 per cent more than throughput at Port Hedland.

Local politicians have also noted that the Aurizon deal is significant of continued strong interest from Asian investors in Western Australian iron ore, with the backers of the West Pilbara Iron Ore Project including China’s Baosteel Resources and South Korea’s POSCO.

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