Question Time

PORT FACILITIES

The Hon. D.W. RIDGWAY (Leader of the Opposition) (14:31): I seek leave to make a brief explanation before asking the Minister for Mineral Resources Development a question about port facilities in the Upper Spencer Gulf.

Leave granted.

The Hon. D.W. RIDGWAY: Members would be well aware that the government instigated with a consortium a feasibility study on the Port Lowly deep water bulk commodities port. Members would also be aware that there are ongoing talks with the government about the use of port facilities in Port Lincoln for the export of product from the Centrex mine. I also draw members' attention to a letter—perhaps some other members have received it—from Mr Bryan Lock of Iron Knob. He points out some things that are worth putting on the record. The letter states:

[There are a number of] people...They are a very concerned cross-section of this region's community and include very many articulate and intelligent people with a common goal, which is to ensure that when the inevitable loading facility is constructed it is in the best place possible for long-term use and constructed in such a manner as to present the current and future generations with minimised environmental risk.

The letter continues:

A consortium wanting to build the loading facility at Port Lincoln

OneSteel barge loading facility at Whyalla

Santos loading facility at Port Bonython

A consortium wanting to construct [another facility] at Port Lowly...

Of course, BHP wants to build an unloading facility at Port Augusta for the expansion of the Roxby Downs mine.

This particular group raises some questions about an area known as Mullaquana and has a view that that is the best location in the Upper Spencer Gulf region to build a deep sea port. Given that there has been a slowing in the world economy and that our mineral exploration has slowed and BHP and other mining companies are finding the economic climate a little challenging at present, it provides an opportunity for the government to get something right for once and build a facility or facilitate the construction of a facility which is in the long-term interests of South Australia. My question is: why has the government not considered all possible sites for this much needed port facility, given there is no response on the Mullaquana suggestion?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:34): I do not accept that the government has not considered it. The Treasurer and I, when we had our community cabinet meeting in Whyalla several months ago, met with a group of residents. The honourable member is quite right: some of them are well connected and some have held senior positions in OneSteel. They were putting forward the Mullaquana proposal. Of course, Mullaquana is about 30 or 40 kilometres south of Whyalla, and I believe it would need a jetty at least 4.5 kilometres long, which would be significantly longer and more expensive to build than a jetty at Port Bonython.

This government, through my colleague the Minister for Infrastructure, has looked at this. When expressions of interest were called some time back, the department had done some preliminary work in relation to this. In the end, proposals were put forward by a number of consortia, including Flinders Ports, which was selected. They have given a report to the government, which the government is now considering. It is up to my colleague the Minister for Infrastructure as to when decisions are made in relation to that.

Certainly, these issues have been canvassed. I think it is clearly understood that, if you were to have a port at Mullaquana, it would be somewhat more expensive than a port at Port Bonython. Of course, the community—

The Hon. D.W. Ridgway: How much more expensive?

The Hon. P. HOLLOWAY: Well, given the jetty is going to be about two kilometres longer—and the fact that you would have to put rail down there for bulk commodities—it would have an additional cost in relation to each tonne going out as well as to the capital costs. The group that was advocating that point out that there is potentially deeper water down there and, obviously, the further south you go in the gulf the deeper the port is. That group made it clear that their motivation for proposing Mullaquana was that it was in their interest in relation to Point Lowly where at least some of them had shacks.

This government has to look at what is in the best interests of the community. The honourable member also referred in his question—and I do not know whether it was inadvertent, but he implied it—to the fact that OneSteel was looking at a barge loading facility. OneSteel has been using barge loading for iron ore for a year or two.

Really, in some ways, it is the key to ensuring that facilities are built in that region. OneSteel itself is obviously a large player. Clearly, barge loading is a more expensive alternative than using a deep water port. OneSteel, if it has not already reached it, is approaching exports of 6 million tonnes a year. It has capacity for an extra 2 million tonnes with barge loading, but that would then be the limit of its capacity. If it were to expand further into bulk loading, it would also need to go to a more permanent facility.

Clearly, OneSteel is a player in this business. The difficulty in reaching any decision in relation to port facilities is that, on the one hand, no-one is going to invest in a port unless they are guaranteed throughput to pay for that port. Companies that are seeking finance to export iron ore, in particular, which should be the main commodity, are unable to proceed unless there is a port.

So, there is a chicken and egg situation here and that is why the government is involved and is a key player to ensure that we can deal with those issues. I will be having meetings with my other colleagues in the near future in relation to that because the government is well aware of the importance of the facility in that area for the future of our export industries, but it is a very complex issue.

We have looked at a number of alternatives, but clearly the timing of projects and bringing that all together will be the challenge facing the government, particularly when some of those potential iron ore producers in the Coober Pedy region of the state are small players and will themselves need to get finance in relation to their projects. A number of negotiations on a number of levels need to be brought together to ensure that this happens. Obviously, the government will be looking at playing its part in this important issue.