Lobby group's fury over Pilbara port sale

The small and mid-tier mining lobby group has maintained its rage against the privatisation of port facility, despite concessions made in the legislation by the State Government.

Treasurer Mike Nahan this morning trumpeted the passing of the bill, describing it as an important milestone in the government’s asset sale program, aimed at improving the State’s finances and increasing international competitiveness.

The sale is expected to net $500 million for the State Government.

But the news drew an angry response from AMEC, which argued the legislation was aimed squarely at plugging a budget hole and provided little protections for junior miners exporting their iron ore through the port.

“The Government is willing to privatise the only point of egress for the next generation of WA’s miners in the region as a short-term fix,” AMEC chief executive Simon Bennison said.

“A key concern is that the legislation will require Utah Point’s acquirer to reserve only half of the port’s 23mtpa capacity for junior miners.”

Mr Bennison was also concerned the legislation did not clearly state what pricing regime would come into effect.

“The government has ignored industry calls to provide transparency and certainty around how much the acquirer will charge users,” he said.

However Dr Nahan said the views of stakeholders, including AMEC and junior miners as the key users of the facility, were considered extensively during committee proceedings through the parliamentary process.

“The State Government has responded to key findings and recommendations made by the Legislative Council’s legislation committee by amending the Bill to improve access protection for junior miners and agreeing to changes to the pricing model under the facility’s access and pricing regime,” he said.

“We understand the concerns of the users of the facility and they have been taken into account in drafting an amendment to the Bill, which imposes a 50 per cent limit on the capacity to be able to be used by non-junior miners.

“This additional protection is an appropriate balance between protecting access for juniors while still allowing others to take up capacity if no juniors are able to - but only in those circumstances.”

The Treasurer said the changes introduced to the pricing regime were consistent with the recommendations of both the Legislation Committee and the Australian Competition and Consumer Commission, with a ‘negotiate/arbitrate’ model now adopted for pricing as well as access.

The detail of the regime would be contained in regulations, as it was not practical for it to be incorporated in the Bill.

“Given the timeframe of the proposed lease and the potential for circumstances to evolve over that period, it is important for the Government to retain the ability to refine the regime to meet the changing needs of the lessee and users,” Dr Nahan said.

Under the amended regime, price would be directly negotiated between the future Utah Point lessee and users seeking access to capacity, with binding arbitration if agreement could be reached by the parties.

Bidders will be required to base their prices on the access and pricing regime and any associated constraints.

The State Government said the legislation set out a clear mechanism to promote fairness in access and pricing for users.

However AMEC argues the legislation and regulations provided no real protection for junior miners.

“The government has pushed all of the protections junior miners are asking for into the regulations saying ‘trust us’, but they may not hold power when they come before Parliament again next year,” Mr Bennison said.

“The value of Utah Point is worth a lot more to WA than what they will get through a fire sale to plug their budget hole.

“This decision risks jobs in the Pilbara

“Many of the service companies could also be impacted.”

Moves to sell off Utah Point will begin after the March State Election.