SA government to work with Arrium to turn Whyalla into a multi-user export port
The South Australian state government will work together with Arrium Limited to create a major multi-user port at Whyalla, which will generate new investment opportunities in the Upper Spencer Gulf.
The MOU will allow other parties to use spare capacity at the Whyalla port, which arose because recent economic conditions have caused Arrium’s annual iron ore exports to drop from 13 million tonnes to 9 million tonnes.
The Memorandum of Understanding (MOU) between the SA government and Arrium is considered one of the first major outcomes to arise from a report by the Resources Infrastructure Taskforce. The report, published earlier in September, looked into the infrastructure for the export of SA’s bulk minerals.
The report identifies Whyalla as one of three preferred options for a multi-user, bulk capacity port in the Upper Spencer Gulf. This could allow the Iron Road, Centrex Fusion, Centrex Kimba Gap and Hawesons iron ore projects to use Whyalla’s spare export capacity.
“The MOU will help guide negotiations that will potentially lead to third-party access to current unused capacity at Arrium’s wholly-owned Port of Whyalla, as well as capacity-expanding investment to support future development in the Upper Spencer Gulf,” explained SA Mineral Resources and Energy Minister Tom Koutsantonis.
Under the terms of the agreement, the SA State Government and Arrium will reach an agreement to cover third-party applications for use of Arrium's Whyalla Port, and revise the Whyalla indentures to support existing and new industries and infrastructure in the region.
According to Arrium Managing Director and CEO Andrew Roberts, the Whyalla Port is a scalable, versatile and valuable infrastructure asset with a proven capability of handling large volumes of bulk mineral cargoes.
“Arrium and the South Australian Government both regard investment in the Whyalla Port as a key opportunity, particularly to encourage the development of numerous magnetite deposits that exist in South Australia,” Mr Roberts said.
Arrium, formerly known as Onesteel, is an international diversified mining and materials company. The Arrium Mining business segment exports iron ore, and owns the Port of Whyalla, with a current capacity of approximately 11 million tonnes per annum.
In 2007, Arrium implemented transhipment handling processes at the port, giving it the ability to load ore onto larger capsize bulk carrier vessels in deeper water. In April 2014, Arrium loaded its largest capsize cargo at the port, with approximately 198,000 wet metric tonnes of iron ore loaded onto the MV Tian Fa Hai.
However, with recent economic conditions in Australia and China decimating Australia’s resources industry and driving down the price of iron ore, both the SA State Government and Arrium are struggling, with resources investment suffering sharp drops. Arrium itself has just emerged from a restructure of its SA iron ore business to reduce cash losses, and closed its Southern Iron mine in January 2015.