The final Cliffs iron ore shipment in June.
BY ELIZABETH FABRI
RECORD lithium exports coupled with an eleventh hour purchase of Cliff’s closing Koolyanobbing iron ore mine has put the Southern Ports Authority – particularly Esperance – in the spotlight through 2018. Moving into the new year, opportunities are expected to continue across its diversified commodity mix.
Since the amalgamation of the ports of Albany, Bunbury and Esperance in 2014, it’s been full steam ahead for the Southern Ports Authority.
In FY18 total exports came to 30.9mt as the ports continued to benefit from WA’s growing economy, with newcomers such as bauxite coming on board.
Iron ore, mineral sands, and nickel have been key contributors to the ports for some time, and over the last couple of years newcomer lithium had also earned its stripes – with 885,000 export tonnes in FY18.
However, in 2017 news that First Quantum Minerals would close its long-running Ravensthorpe nickel operation – which used Southern Ports’ Esperance stevedoring services– sent shockwaves through the community.
In January, another long-time customer, the Cleveland-Cliffs-owned Koolyanobbing mine, announced it too would be shutting its doors and waving off its last shipment from the Esperance port in June.
The news rattled the industry, putting a dent in the port’s overall trade for FY18 as shipments winded down, and with about 120 jobs at the port on the line.
In mid-June – weeks before the last shipment – Mineral Resources came to the rescue, announcing a last-minute deal that it would purchase the Koolyanobbing project and associated infrastructure for an undisclosed sum.
The mine was strategically positioned next to Mineral Resources’ existing Carina iron ore project, just 50km north of Southern Cross.
Under the terms of the purchase, the WA Government agreed to provide subsidies and fee waivers to facilitate the sale for the sake of jobs and State-royalties.
And while the deal was not able to rewind the clock and avoid a 27 per cent decrease in iron ore exports incurred in FY18 (from 11.2mt to 8.2mt), it would however guarantee continued exports through Esperance for the mid-term.
The acquisition was welcomed by the industry, with mining resumed in August, and less than a six month gap between Cliff’s final iron ore shipment in June and Mineral Resources’ expected first shipment in October/November.
However, under the purchase, Mineral Resources signed an agreement guaranteeing shipments of only 6mpta of ore out of Esperance for the next five years; a substantial slump from what the mine had been exporting previously.
The decreased throughput led to a number of voluntary redundancies at the port in September.
“Eighteen staff have accepted offers of voluntary redundancy as part of a restructure to accommodate a decline in iron ore throughput at Esperance,” Southern Ports interim chief executive Alan Byers told The Australian Mining Review.
“This successfully concludes the voluntary redundancy process with the target reduction achieved, and helps secure the future of the existing Esperance workforce.”
Mr Byers – who stepped in as chief executive in June after inaugural chief Nicolas Fertin resigned – said additional capacity available at the port meant opportunities were open to forge partnerships with new customers.
“The suspension of operations at First Quantum Minerals in August 2017, followed then by the announcement that Cleveland Cliffs would cease mining at its wholly-owned iron ore complex at Koolyanobbing, threw up both challenges and opportunities,”
“Southern Ports has been in discussions with about 20 potential new port customers, some of which may be able to utilise the capacity freed-up by the reduction in iron ore and nickel exports that has occurred in the past year.”
The Albany port was the first port in WA.
Port Performance
While overall trade through the ports dropped 10 per cent in FY18, Southern Ports was optimistic for coming years, with lithium set to be a key driver for future growth across Esperance and Bunbury.
“Amendments to a Southern Ports’ environmental licence allowed export of spodumene concentrate through Esperance Port, which secured ongoing exports from Galaxy Resources and attracted new customer Tawana Resources during FY17-19,” Mr Byers said.
Export of lithium at Esperance almost quadrupled through FY18 increasing from 55,000 tonnes to 202,000t.
Mr Byers said the amended licence would facilitate additional trade of up to 1 million metric tonnes per annum for export of spodumene using a tipping container system.
“We continue to work with our current spodumene concentrate proponents Galaxy and Tawana Resources to facilitate export of their product and continue to talk to other potential proponents about future exports,” he said.
Qube Bulk had also recently constructed a new state-of-the-art lithium bulk storage facility in Esperance, which would facilitate Galaxy and Tawana’s exports through the port.
In addition, Southern Ports had also completed 12 shipments of nickel and copper concentrate since June 2017 via a trial arrangement with Independence Group’s Nova operation.
The arrangement led to a more than 65 per cent increase in nickel exports.
“We are now seeking to continue that trade on a permanent basis through an amendment to our environmental licence,” Mr Byers said.
The Bunbury port had its share of positive results too, with an almost 40 per cent increase in spodumene exports in FY18 to 683,000 tonnes, and 10.7mt of alumina exports.
The results were driven by two new trades – bauxite from Alcoa, and alumina hydrate from Worsley Alumina – facilitated by upgrades to Bunbury’s Berth 8.
“These major upgrades to Berth 8 will result in reduced shutdown time, the ability to facilitate different types of products, and increased load rates,” Mr Byers said.
“Equipment upgrades will reduce loading time by at least 166 hours over the next 12 months, and washdown times by about 222 hours.”
He added modelling for a new in-house scheduling system at Bunbury was in the final stage, which would increase berth capacity.
Southern Ports Authority is the amalgamation of the Ports of Albany, Esperance and Bunbury pictured.
The Year Ahead
Southern Ports was also set to get a new chief executive in FY19.
Mr Byers said recruitment was being undertaken by an executive search firm, which had “cast a wide net to identify candidates with the experience and background to successfully lead Southern Ports”.
“To allow flexibility, the process does not have a set timeframe however it is not expected to be completed until at least the end of 2018,” he said.
“In the meantime, I am focussed on my role as interim chief executive, and am grateful for the support and experience of the Southern Ports team.”
Mr Byers said key activities for FY19 included improving access to the Albany port for potential customers via new leasing opportunities, as well as accommodating increased forestry and agriculture products.
At Bunbury, the process was underway for the amendment to the 2009 Inner Harbour Structure Plan.
Southern Ports was also working closely with the State Government’s Westport: Port and Environs Strategy.
Then at Esperance, the company was progressing plans to improve the Berth 3 facility.
“We have designed upgrades to the dedicated iron ore Berth at Esperance to take advantage of the new capacity that would enable the berth to cater to all vessels, including cruise ships,” Mr Byers said.
“Southern Ports is also working to address all recommendations in the State Government-commissioned independent Post-Amalgamation Review.”
