Partners agree to integrate Pilbara infrastructure

Brockman, Atlas and Aurizon decide to integrate their rail and port projects on the back of their study, first phase released today

Partners agree to integrate Pilbara infrastructure
Partners agree to integrate Pilbara infrastructure

By Anna Game-Lopata | April 5, 2013

Iron ore explorers Atlas and Brockman Mining Limited, along with rail freight
provider Aurizon have decided to integrate their rail and port projects
in the East Pilbara region of Western Australia.

The Alliance partners today released the first phase of their East Pilbara Independent Railway study.

Brockman says the initial results the study establish the merits of a new, independent, multi-party rail system to connect iron ore mines in the East Pilbara to Port Hedland.

The study, which aimed to investigate the viability of a fully integrated mine, rail and port logistics solution, initially for Brockman and Atlas, concludes significant synergies could be achieved across the supply chain.

Brockman, owned by Bermuda-incorporated investment company Wah Nam International, had been working with Atlas and its subsidiary FerrAus to develop new port facilities at South West Creek in Port Hedland under a joint venture known as North West Infrastructure (NWI).

At the same time, Brockman, Aurizon and Atlas were exploring an end to end rail solution to transport the iron ore from the mines of Brockman and Atlas to Port Hedland.

Atlas, Brockman and Aurizon have an export allocation of 50 million tonnes per annum from the WA port.

But the new plan is to build a new standard-gauge railway in the East Pilbara which connects to dedicated port facilities at South West Creek, Port Hedland, thereby aggregating production from a number of operating and prospective mines.

Aurizon spokesperson Mark Hairsine says it was clear there was a need to examine the East Pilbara rail development and the proposed North West Infrastructure port development
as a single integrated infrastructure project.

"We’re envisaging a multi-user rail and port system that is incentivised to consolidate volumes to available capacity," Hairsine says.

"Aurizon has a track record of operating multi-user rail infrastructure for the resources sector."

Brockman Australia Chief Executive Officer Russell Tipper confirms the study demonstrates the benefits of working with aligned parties to provide infrastructure solutions.

"Any future development proposals would be subject to further agreement between the Alliance participants and the approvals of their respective boards," Tipper adds.

In terms of the costs, Hairsine concedes any project will clearly be a significant investment and subject to the normal approvals and hurdles rates for the respective companies.

"The more significant outcome of this integration however, is the reduction in complexity for potential funding solutions," he says.

The Alliance partners have now agreed to the next stage of evaluation, an integrated rail and port pre-feasibility study, aiming to shortly determine a scope and timing for the combined port/rail project.

Environmental considerations are currently being considered as part of the Alliance work.

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