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The Western Australian government is sitting on a “critical” report on the potential to expand the capacity of the minerals port at Port Hedland.
Earlier this year the Barnett government appointed PricewaterhouseCoopers to undertake a review of the Port Hedland Port Authority’s operations.
The review was spurred by an $80 million blowout in building the new Utah Point berth, and a $1.5m loss in 2009-10.
Analysts from RBS said yesterday the review was “one of the most important news flow events for the iron ore space” and “critical to the iron ore expansions of existing users” of the port.
BHP Billiton, Fortescue Metals Group, and Atlas Iron are currently jostling for position at the port as their production and shipping targets rise rapidly.
Expanding the capacity of the port has the potential to unlock billions of dollars more in iron exports from Pilbara operations.
A spokesperson for WA transport minister Troy Buswell told News Ltd yesterday the Government had been looking at the PwC review for a “couple of months” but declined to comment on when or if it would respond to it.
RBS analyst Lyndon Fagan said the PwC review could find no additional capacity available in Port Hedland’s inner harbour, but its findings might suggest improved efficiency of current operations could free up space.
“This includes faster loading times, larger ships, and potentially less time between ships,” he said.
“This is likely to result in a higher overall capacity for the port.”
Fagan said an increase in efficiency by ten per cent would create an additional 50Mtpa space, which might be allocated to FMG’s aggressive plans to lift production from 55 mtpa to 155mtpa.
“A timely response from the state government on the port review by PwC is critical for Fortescue’s expansion plans to progress smoothly,” he said.
BHP currently holds the majority of port allocation in Port Hedland.