Juniors welcome WA port decisions

PERTH (miningweekly.com) – ASX-listed juniors Atlas Iron and Mineral Resources on Tuesday welcomed the Western Australian government’s decision to keep export costs from the Utah Point Bulk Handling Facility (UPBHF) unchanged.

Atlas and Mineral Resources are the only two remaining junior miners that export Pilbara product through the Utah Point terminal.

The Western Australian government last week announced plans to increase shipping fees in an effort to generate some A$95-million in revenues. While exports from the ports of Fremantle, Albany, Bunbury, Esperance and Broome will all increase, the government announced that junior miners using the UPBHF would be spared the increase, with the discount in port charges remaining in place.

The port charge reduction package operates as a tiered system that reduces the standard UPBHF charges payable by the juniors at times when iron-ore prices fall below pre-determined levels closely connected to the juniors' breakeven cost of production.

The previous state government first introduced this package in 2015 with the collapse in iron-ore prices, which highlighted the fact that the Pilbara-based junior miners were forced to contend with significantly higher costs associated with mine-to-port road transport costs, port and stevedoring charges and international freight costs when compared to the major miners who materially benefit from the significant cost savings associated with owning rail and port facilities as well as the economies of scale created by exporting significantly higher volumes of products. 

Atlas Iron and Mineral Resources in a joint statement on Tuesday commended the government for recognising that UPBHF port charges constitute a small part of the overall social and economic benefits the juniors deliver to the state every year.

“The extension of A$2.50/t port charge reduction package will facilitate ongoing trade by the juniors when iron-ore prices are low and should directly preserve over A$40 in royalties, payroll taxes and general economic expenditure that stays in Western Australia for every tonne export by the juniors,” the companies said.

“Government’s decisive action to extend the UPBHF port charge reduction package to preserve the benefits delivered by the juniors also serves to highlight the importance of government maintaining control over infrastructure assets that are crucial to the ongoing facilitation of trade by multi-users for the greater economic benefit of the state.”