Fortescue project floats possibility of new harbour

Port Hedland may yet get a new outer harbour, with Fortescue Metals Group considering such a development for its new magnetite joint venture with Baosteel and Formosa.

The joint venture was formed in August under the name FMG Iron Bridge and will develop a set of magnetite assets that have been spun out of Fortescue’s flagship iron ore export business.

Speaking in Port Hedland on Tuesday, Fortescue chief executive Nev Power said the bigger second stage of the FMG Iron Bridge joint venture would likely require its own port structures rather than use the existing facilities at Port Hedland.

‘‘We will probably build a stand-alone facility for that and it could be through an outer harbour,’’ he said.

BHP Billiton was famously planning to build a $US20 billion outer harbour at Port Hedland before abandoning those plans in mid-2012 on the back of weakening iron ore prices. Mr Power stressed that any outer harbour considered for FMG Iron Bridge would likely be much smaller and cheaper than the one BHP was mulling.

Despite raising the prospect of a stand-alone port for the joint venture, Mr Power reiterated his firm belief that significant amounts of spare capacity remain available within Port Hedland’s traditional inner harbour.

The official export capacity at Port Hedland is 495 million tonnes, and Mr Power said the real capacity was likely to be between 600 and 700 million tonnes. Fortescue starts work on its fifth berth this month and it may not be the last.

‘‘We’ve still got AP5 ( the fifth berth) to construct, we’re very comfortable about the berth space we have there, and we see there is more opportunity to continue expanding berths as and when we would need them,’’ Mr Power said.

‘‘We would have to go through approval processes, but the most important part of that will be: does the port have the capacity through the channel and infrastructure to be able to cope with that? And if the answer is yes, then we expect the government would want to see it happen.’’