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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-10-13 Daily Xml
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Question Time

IRON ORE, EYRE PENINSULA

The Hon. C.V. SCHAEFER (14:50): I have a supplementary question. Why did the minister allow a 10 year framework, in opposition to the three year allowance of access to the port, as suggested by the fishing industry?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:50): A 10 year access instead of the—

The Hon. C.V. Schaefer: Instead of the three year allowance, which was suggested.

The Hon. P. HOLLOWAY: For the simple reason that, if there had been a three year access, the investment that would be required for a ship loader would not be recovered. It would not be a viable option. The expected life of the resource at Wilgerup is now about eight years, and that should be sufficient to ensure that the iron from that source is exported.

As I indicated in answer to a question from the Hon. Carmel Zollo, the fundamental constraints of the project will be the rail system, which is limited to 1.6 million tonnes a year for this project, and also the capacity of the port to handle larger volumes. That is why I indicated that future expansion in that area, for future iron ore development which we hope will take place, will require the development of a new port that will take larger vessels, which of course will reduce the cost of export and therefore help pay for the investment that will be required for a larger port. Clearly, for that to happen, it will need a much larger throughput.

As I said, to kickstart the industry, the current facilities at Port Lincoln will be able to cope with that relatively small volume of ore. When I say 'relatively small', I mean relative to the sort of export that comes out of other ports within this country, such as those in Western Australia and Queensland, which in many cases have some tens of millions of tonnes of capacity. So, 1.6 million tonnes a year is relatively small to ensure that that industry can be viable and generate the cash flow necessary for further development of other resources within the Eyre Peninsula region and the development of a port. That is why that decision has been made.

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