It will cost as much as some of the huge LNG projects currently planned or underway: at $20 billion and eight years, BHP Billiton’s plans to expand its key iron ore port at Port Hedland, off the northern WA coast, will be gigantic by any measurement.
To put it another way, the project will have a cost roughly equal to the estimated cost of expanding the already large Olympic Dam mine of BHP in South Australia. The BHP board has to give that project the final go ahead later this year, but the Port Headland expansion will be finished before Olympic Dam is completed, assuming all the approvals are given.
Iron ore is BHP’s mineral of choice and the expansion is vital for the company keeping up with the ambitious plans of Rio Tinto and Vale of Brazil, to boost their iron ore output in the same time.
Both will be enormous projects with huge earth moving, excavation at their heart.
Both should also generate enormous business for local contractors and suppliers, especially the Port Headland expansion.
Yesterday that ambitious plan moved a step closer with approval by WA’s Environment Protection Authority with only minor conditions.
The Outer Harbour plan is designed to lift BHP’s Pilbara iron ore exports to 350 million tonnes by 2020, compared with the record 159 million tonnes it is expects to ship this financial year (ending June 30).
The project, which will involve the construction of a four kilometre jetty, wharves and new ship loaders outside the existing port, could eventually lift the company’s exports to 450 million tonnes each year.
Analysts expect the plan will cost more than $20 billion to achieve, prompting many to speculate the company would find it easier to increase its port capacity at Port Hedland by simply acquiring one of the smaller iron ore players who currently share the port.
Smaller players with port access include Atlas Iron and Brockman Resources.
The EPA said the project would have a negative impact on marine and mangrove environments, and that existing dust problems in Port Hedland would be exacerbated by the project. But the authority said those impacts could be managed to allow the project to proceed.
The EPA’s recommendation will now be considered by WA Environment Minister Bill Marmion.
The outer harbour project still requires federal approval before work can begin.
BHP shares fell 24c to $37.24 yesterday in a market that was also weaker.
The EPA said in its report the expansion will be constructed in four stages, with the combined offshore and onshore construction period lasting approximately eight years if each stage is built sequentially.
"Onshore and offshore infrastructure associated with the proposal includes rail and iron ore handling, stockpiling and shiploading facilities (and associated infrastructure), jetty, wharf and shipping channel offshore of Finucane Island.
"Iron ore will be transported from inland Pilbara mines along the existing Port Hedland-Newman Railway and proposed Western Spur Railway to stockyard facilities at Boodarie.
"The Boodarie Estate stockyard infrastructure would supply iron ore via a 6 kilometre (km) overland conveyor to a new transfer pad located to the west of the existing Finucane Island facilities.
"A 4 km jetty would supply the ship loaders located at the proposed Outer Harbour."
When completed, the company says vessel movements from the Outer Harbour facilities would be in the range of 960 to 1400 a year, or well over three massive ore carriers a day.
And rare earths miner Lynas Corp was in a trading halt last night as it wrapped up a new funding deal said to total $100 million.
Market analysts said Lynas needs the money to tide it over until its controversial Malaysian rare earths processing plant is completed and operating.
"The trading halt is requested pending an announcement concerning a funding transaction for the company," Lynas said in a letter to the ASX yesterday.
The halt comes a week ahead of a meeting of Malaysia’s Atomic Energy Licensing Board to decide whether to approve a temporary license for Lynas to commission the rare earths processing plant in the centre of the country. The project has generated protests and opposition in Malaysia.
The licensing board’s recommendation will then be submitted to federal cabinet for final approval of a pre-operating licence for the $200 million plant, which has been delayed by the protests.
Start-up of the plant, which has agreements to supply German giants BASF and Siemens, could be delayed until after national elections due in Malaysia later this year, according to some analysts.
Lynas shares closed last Friday at $1.28, valuing the company at $2.2 billion.
Melbourne-based investment company AMCIL (part of the Australian Foundation group) did better in the December half year than its two listed stablemates to report so far in Djerriwarrh and Mirrabooka.
AMCIL, which was once aligned with stockbroking firm JBWere (as were Mirrabooka and Djerriwarrh) posted a net profit of $4.929 million for the six months to end-December, down 2.2% on the result for the December half year of 2010.
But AMCIL’s net operating result fell 9.4% to $3 million, largely due to a $536,000 net loss on its trading portfolio during the first half.
The trading loss compares with a pro
