ONESTEEL Limited (OneSteel) has decided not to allow Western Plains Resources Ltd to use transhipment barges at the Port of Whyalla for export of its direct shipping iron ore (DSO) from the Peculiar Knob and Hawks Nest projects in South Australia.
WPG has been negotiating with OneSteel for access to the Port of Whyalla since 17 January 2007.
The company believed that the negotiations were nearing completion and that they would lead, by 31 December 2007, to a satisfactory outcome for both parties.
WPG was advised by OneSteel on 17 December that it had decided not to proceed to formalise the previous proposal put to WPG for the use of excess capacity on the transhipment barges.
OneSteel further advised that, absent of an agreement in relation to the use by WPG of the barges, it was unlikely that OneSteel would agree to WPG’s proposed capital works at Whyalla.
WPG had proposed to build, at its own cost, a rail loop, tip pocket, ore storage shed and barge loader, costing some $54 million, as part of the development of the $108 million Peculiar Knob project.
On 19 December OneSteel advised that it may be prepared to offer some form of port access rights to WPG but that a proposal was unlikely to be forthcoming for some time.
WPG said it will continue to work on alternative port opportunities. These include Port Pirie, Darwin and the proposed Port Bonython development.
WPG still believes that Whyalla is the best option, and said it was prepared to negotiate a port access agreement with OneSteel, under normal commercial terms, including ring fencing the existing barge fleet for OneSteel’s own use.
WPG believes it can obtain suitable alternative barging facilities on short notice, and would be prepared to make its own barge assets available to OneSteel on a back-up basis.