PORT LINCOLN IRON ORE EXPORT FACILITY

The Hon. R.L. BROKENSHIRE (15:01): I seek leave to make a brief explanation before asking the Minister for Mineral Resources and Development a question about the export of minerals through the city of Port Lincoln.

Leave granted.

The Hon. R.L. BROKENSHIRE: I repeat Family First's support generally for the mining industry and the tuna industry, and our belief that a middle road can be achieved on Eyre Peninsula for those two industries.

I refer the minister to comments in today's Port Lincoln Times (which, in fairness to the minister, he may not have had a chance to read due to his busy schedule) by the Port Lincoln mayor, Peter Davis. He said he was 'appalled at the news another mining company wants to join Centrex Metals in exporting iron ore through the city's main wharf'.

The story states that Lincoln Minerals announced last week that it wants to export haematite iron ore, just as Centrex has been given permission to do. In fact, in documentation I have seen from Lincoln Minerals it says that it can see no reason why it should not be able to access the port of Port Lincoln. Mayor Davis also stated:

It is sheer bloody-minded stupidity to export ore out of our beautiful harbour.

I understand that there are significant impediments to minerals being taken by rail from most or all of Eyre Peninsula to a deep-sea port for export. I understand the difficulty for the minister in trying to get what is potentially billions of dollars worth of iron ore from the West Coast but, notwithstanding the minister's difficulty, I do have some specific questions regarding Port Lincoln. My questions are:

1. Over the next 10 years, how many other mining ventures are likely to be in a position to begin exporting ore or other minerals from Eyre Peninsula and will be reliant upon the approved bulk handling facility at Port Lincoln?

2. What is the status of private and public interest in the proposed deep-sea port facility at Sheep Hill, approximately 50 kilometres north of Port Lincoln?

3. Does the minister concede that his government has set a precedent by approving the rights of Centrex Metals to export and that its hands are tied in considering a proposal from Lincoln Minerals or, indeed, any future companies to utilise the Port Lincoln port?

4. If not, can the minister outline the process for all miners who want to use Port Lincoln in the future for mineral export, particularly prior to the next 10 years when we hope to see a more extensive port?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (15:03): I thank the honourable member for his important questions. In relation to the first question (which I think was how many other mining companies are likely to wish to export ore from lower Eyre Peninsula), I am aware of at least one other that would have the potential for it. Obviously a lot of exploration is going on in lower and middle Eyre Peninsula. Some of that exploration has turned up promising results, but they may not yet meet JORC compliance—in other words, the resource established to the level of JORC compliance so that any further development of that site would be possible.

While there are some promising exploration results on the peninsula, it is difficult to say exactly how many of those may proceed. Certainly there are other significant potential iron ore deposits on the peninsula and, of course, one of the reasons why the government would like to establish an iron ore industry here is that it will provide economic diversity to the region. Ultimately, it will be on such a scale that it will provide, I believe, investment in another port, which brings me to the second question asked by the honourable member, which I think was about the public-private interest in the potential location of a port at Sheep Hill.

As I understand it, Centrex Metals itself, which has been given permission to export from Lincoln, at least has an option over some of the land there and some work has been done investigating that particular site. I have not visited the site myself, but I am told that there is water that is 20 metres deep within half a kilometre offshore. If the tides and the orientation and prevailing winds and the like are suitable, obviously that is a location that has a great deal of potential.

I am aware that, particularly now that the Foreign Investment Review Board has given approval for Wuhan to invest within the deposit and the development of that deposit at Wilgerup, there is the potential for a port to be developed and some further work to be done in the future. Obviously, the government will encourage that.

The honourable member referred to the expressions of Lincoln Minerals to export from Port Lincoln. Let me say that I have not yet officially been contacted by that group. I did have a meeting with them 12 months ago or more, but I certainly have not, in recent times, been in contact with them. The first I knew that they were seeking approval was through the media.

I think the honourable member referred in his question to the fact that the rail line and the capacity of Port Lincoln is somewhat constrained. I indicated in reply to a question about the Centrex proposal that permission to export from Port Lincoln was purely related to the project at Wilgerup. In that sense, I do not believe that the Wilgerup approval does set a precedent. It was made clear that any other application would have to be studied completely independently. I would not agree that the government's hands are tied in any way in relation to that.

To any company that wishes to look at these issues, either through Port Lincoln or any other port, my advice would be that they contact the government and discuss these issues with them. If projects are becoming more viable in that region, that does provide the capacity for investment within the area at Sheep Hill. That is obviously something that the government would need to consider when there is interest in that. My advice to any company—Lincoln Minerals or any other—is that they should talk to the government soon and do it directly by contacting us rather than going through the media.

I do not accept that it sets any precedent. As I said, it was made clear at the time that the approval was given—remember: that was the Wilgerup approval for Centrex to export iron ore through Port Lincoln—that it was considered as a crown development sponsored by DTEI, which is responsible, of course, for marine areas, and it was assessed appropriately, with the Development Assessment Commission making a recommendation to me as Minister for Urban Development and Planning. That is how I became involved in that decision, not as Minister for Mineral Resources Development.

In relation to any future application, obviously they would have to discuss that not only with the government but also the port operator and the rail operator and others to see whether, in fact, there is any capacity because, as I indicated in my answer to that previous question, it is somewhat constrained. I stress this point: just because Centrex was given approval for its use of Port Lincoln for 10 years for the 1.6 million tonnes, it certainly does not mean that the government has its hands tied as the honourable member suggested in relation to supporting other export operations.

I have probably covered the last part of the honourable member's question, which was about the process involved. Obviously, Centrex, the company involved then, had approached the transport and infrastructure departments, and they had facilitated consideration of the port, through a crown development. Obviously, if any other miner on Lower Eyre Peninsula wishes to look to the future, they should really contact the government, and we can look at the issues. I would hope that, at some stage in the near future, a new port will be developed at Port Lincoln. I understand that even the grain industry is somewhat constrained at present. I think I read some reports recently indicating that even grain exports from Port Lincoln were somewhat constrained because of the capacity of the system to cope.

A new port development could well be in the interests of Eyre Peninsula, but obviously it is a 'chicken and the egg' situation in that for that to happen sufficient throughput is needed to justify the investment. Once that happens, I have no doubt that, in the next decade, a new port will be developed within Spencer Gulf.

I repeat the point I made in answer to previous questions, and that is that one of the benefits of letting the Centrex proposal go ahead is that it proves to the major customers in the world the undertaking's viability and the fact that Eyre Peninsula is and can be a reliable source of high quality iron ore. I believe that the significant volumes coming out of that area justify infrastructure investment in the future. Certainly, my advice to Lincoln Minerals is that it talks to Flinders Ports and the rail companies and then goes to the government and not do it through the media.