Like the Anketell port project, BHP Billiton’s Outer Harbour Development (OHD) at Port Hedland is a complex proposal.
While recently approving close to $1 billion in pre-commitment funding for the development, the company is still a long way from getting the project online.
Like other major projects in the Pilbara, the OHD represents a changing environment for miners, with different problems now taking precedence.
For a lot of companies accommodation and shipping developments are now as important, if not more important, than expansions on the mine.
Gone are the days where environmental approval was the biggest challenge, it’s now the community, not the regulators, which are the toughest nut to crack.
If BHP is to keep its Pilbara expansions and OHD on track the support of locals is vital.
Earlier this year we saw just how important it was, with the Town of Port Hedland rejecting the company’s plans to accommodate 6,000 fly-in fly-out workers in a camp outside town.
For BHP its initial failure to win over the community, while not catastrophic, meant delays as it went back to the drawing board to devise new plans.
It also meant plenty of bad press, as Fortescue Metals Group warned against “favouritism” for BHP’s camp and WA’s Corruption and Crime Commission announced a preliminary investigation into the proposal.
But FMG aren’t the only ones voicing concern over the proposal, with the initial consultation period attracting 20 submissions from organisations.
Only two submissions, from Qantas and Pilbara rival Atlas Iron, endorsed BHP’s plans.
Like the FMG and Aquila Resources plans for Anketell to the South, BHP’s harbour development is fast becoming a delicate negotiation process between locals, companies, and multiple levels of Government.
But before BHP can get the outer harbour built it needs to find and house enough construction workers.
While the local Government has already rejected the company’s first proposal, BHP has revised its plan and the council will meet this month to consider the proposal.
BHP said it had been working for more than a year to find suitable accommodation for its OHD construction workforce, and these talks had involved the Town of Port Hedland as well as the State Government.
BHP is still looking to develop a FIFO camp near Port Hedland’s airport, where there are already multiple camps, and it’s aiming for four main developments through the proposal.
The most important for the company is securing the accommodation of 2,000 people for its OHD workforce.
This figure is down from the initial 6,000 figure first proposed by BHP, but has the option to extend by a further 2,000.
The second is securing a ten year lease for the accommodation space, which is again down from the 25 years initially proposed.
BHP is looking to develop four lots for worker accommodation, and develop a further 33 commercial lots for the Town of Port Hedland.
The commercial lots will allow the council to lease or sell the space to businesses and allow local businesses to cash-in on the population increase in the area. The commercial lots are an attempt to develop the community in Port Hedland and will form an important part of selling the scheme to locals.
“Commercial space is at a premium in Hedland, which makes it hard for new businesses to open and existing businesses to expand their services,” the company said.
“Bringing 33 commercial lots to the market quickly would help ease that problem, and enable more services for Hedland residents.”
The cost of subdividing these lots and connecting power, sewage, water, and telecommunications will also be done at the cost of BHP. “This would help to ease the accommodation pressures faced by other businesses and service providers in Hedland,” the company said.
BHP estimates the entire accommodation scheme will earn Port Hedland around $20 million a year, totaling $200 million for the initial term.
While money already featured strongly in BHP’s previous marketing to locals it’s likely it will again be spruiking the money. BHP has already rolled out an advertising campaign in the region to make sure locals are aware of the benefits.
Since the initial rejection BHP said it had been working with local and state governments on a new plan and had “taken community feedback into account”.
From all previous indications both the State Government and Town of Port Hedland are keen for BHP to get the OHD underway once it has the right plan together.
And while more negotiations lie ahead most locals are excited by what the plan, which will make Port Hedland the largest tonnage port in the world, will mean for the town and region in general.