Port of Esperance to welcome second iron ore customer after Southern Ports and Gold Valley shake hands

Mineral Resources’ iron ore monopoly at the Port of Esperance will be broken when, for the first time in its history, Esperance hosts two exporters of the steelmaking commodity. Privately-owned mining minnow Gold Valley is set to muscle in on MinRes’ turf after being granted access to critical infrastructure at the Port, including rail receival facilities, conveyors, shed space and the ship loader. Since the iron ore circuit at Esperance was built in the 1990s only one miner at a time has been given the green light to use it. Ore will be transported by road from Gold Valley’s Wiluna West mine in the Mid West to Kalgoorlie, before being railed to the Port on trains operated by Aurizon. The first shipment is expected to set sail in September and boost the iron ore volume that flows through Esperance by up to 1.5 million tonnes per year. Iron ore is the Port’s primary export commodity thanks to MinRes’ Koolyanobbing operation 50km north of Southern Cross, with more than 7.6mt sent to China last financial year and almost 37mt from 2018 to 2023. The Chris Ellison-led miner also ships the lithium extracted from its Mt Marion mine via Esperance. The State Government waived royalty payments and slashed port fees at Esperance in 2018 as a sweetener for MinRes to save the Koolyanobbing mine from being shut down by previous owner Cleveland-Cliffs. In 2021 a group of junior iron ore players led by GWR Group — the former owner of Wiluna West — lobbied the Government to loosen MinRes’ stranglehold on the Port’s facilities. Minister for Mines and Ports David Michael said opening up Esperance has been enabled by continued government investment into regional port infrastructure. “The Cook Government is investing strongly in Southern Ports’ growth, with $116 million of funding announced in the recent State Budget for infrastructure upgrades and initiatives,” he said. “I am pleased to see the use of the rail system for this trade, which would otherwise be trucked by road to the Port of Geraldton.” Gold Valley’s owner Yuzheng Xie thanked Southern Ports for coming to the table and reaching an agreement. “This innovative deal ... is a winner for the company and also a winner for the State Government and the people of Esperance where it will provide employment and an input into the town’s economy,” he said. Wiluna West’s location far from the shores of the Indian Ocean has created major logistical headaches. The mine is located 940km from road to Esperance and the ore it produces currently has to be trucked about 720km to the Port of Geraldton. It sustains about 200 workers, the majority of which are tasked with trucking ore. Mr Xie told The West Australian in April that traversing such a vast distance by road means the project is only viable when the iron ore price is above $US100 per tonne. The steelmaking ingredient is presently sitting at $US105.50/t. West Perth-based Gold Valley bought Wiluna West from GWR at the end of 2023 for $30m plus a $2 per dry metric tonne royalty.