A proposal to privatise the Utah Point iron ore port was criticised as creating uncertainty for junior miners who currently use the port.
The Association of Mining and Exploration Companies (AMEC) said privatisation of the Port Hedland Utah Point Bulk Handling Facility had created “considerable uncertainty” for junior miners such as Atlas Iron, Mineral Resources and Consolidated Minerals, which currently use the port.
AMEC said the original development of Utah Point had been co-funded by junior mining companies which also invested heavily in their own operations on the understanding that the port would remain exclusively available to the junior mining industry.
The Pilbara Port Privatisation Bill has been referred to a parliamentary committee after the Nationals Party moved a successful motion in the Legislative Council on Tuesday last week.
AMEC welcomed the unanimous support for the motion, stating that the committee would facilitate a “thorough review and closer analysis of the dire consequences that privatisation of Utah Point will likely have for Western Australia if the appropriate safeguards are not implemented”.
Key concerns outlined by AMEC include that the Utah Point facility should remain exclusively dedicated for the use of junior miners, and that fees and charges at the port must be commercially reasonable.
Changes to fees made by the Pilbara Ports Authority in 2012 brought increased costs to junior producers as well as new charges which saw a higher rate per tonne charged for handling increased volumes, despite the corresponding reduction in overall costs to the port operator.
The changes saw Utah Point generate returns of more than 30 per cent on investment, whereas Commonwealth guidelines suggested returns for similar infrastructure should be around 8-12 per cent.
AMEC said that for the port to remain commercially viable the regulations must ensure prohibition of “unjustified or arbitrary” increases to the pricing regime.