BHP’s desire to grow iron ore exports has cleared a major hurdle, with Western Australian environment regulators approving the company’s request to export up to 330 million tonnes per year from Port Hedland.
Dust emissions near the township of Port Hedland were a major factor in the decision, but the WA Department of Water and Environment Regulation gave its blessing on the grounds BHP’s mitigation efforts would ensure there was no net increase in dust emissions.
The approval comes one year after the same agency gave Fortescue permission to grow exports by 20 per cent to 210 million tonnes.
Having cleared the environmental hurdle, BHP and Fortescue now await a review of channel capacity within the port by another WA government agency; the Pilbara Ports Authority (PPA).
BHP, Fortescue and Mineral Resources have all flagged their desire to get more export capacity within Port Hedland, and the PPA is expected to carve up the extra allocations soon.
BHP had been licensed to export 290 million tonnes through Port Hedland and has been getting close to that limit in recent years, with the company telling investors it could ship as much as 288 million tonnes in the year to June 2022.
BHP chief Mike Henry stressed during last month’s investor briefings that if approval to export 330 million tonnes per year were forthcoming, it would not necessarily mean the company would ever export such volumes.
Rather the company has been keen to ensure there is more headroom above its current export capacity.
With BHP’s iron ore division now producing at very close to its licenced export rate through Port Hedland, the company sought to avoid a situation where it had to spasmodically reduce production to avoid breaching its export licence.
BHP believes it can get close to 310 million tonnes per year through low cost debottlenecking initiatives across its mines, railways and ports, and would require more substantial investment to grow output close to 330 million tonnes.
Iron ore was fetching $US128.75 per tonne on September 10 according to S&P Global Platts; down from more than $US233 per tonne on May 12.
Source: Australian Financial Review