PORT HEDLAND, Western Australia (CU)_Just over a year ago, the government of Western Australia was due to award a tender for additional export capacity within Australia’s iron ore heartland. However, there has been extremely slow progress on the part of the local government in delivering a decision regarding the award for the section of Port Hedland called South West Creek, which is a hotly contested among iron ore companies in the country. Meanwhile, as the industry eagerly awaits the decision, two of Australia’s mining magnates have agreed to work together in a rare bout of cooperation this week, with the aim of securing the award for the facility at Port Hedland.
While several junior iron ore aspirants have already applied for more capacity in the region, the contest for the tender in South West Creek was viewed as a battle between Australian billionaires Gina Rinehart, Chris Ellison and the Fortescue Metals Group.
If the recent pact is formalised, it would lead Ellison’s Mineral Resources Limited and the iron ore companies privately held by Rinehart to consider the potential for a joint export facility in South West Creek which would serve both companies. According to reports, the Roy Hill Iron Ore business, in which 70 per cent ownership is possessed by Rinehart’s Hancock Prospecting, is expected to provide rail haulage and port services to Ellison’s Mineral Resources, as part of their collaboration.
For over half a century now, partnerships between iron ore miners have been rare in Western Australia, with mining giants like Rio Tinto, Fortescue and BHP building their own railways to carry their output to port instead of sharing infrastructure with each other. The pact between Rinehart and Ellison will go ahead if they are successful in securing the extra capacity from the local government.
