By PRATHAMESH DESHPANDE
The closure of Mineral Resources’ iron ore hub by the end of this year may open doors for other companies that have struggled to access the port, a maritime union spokesperson says.
Last week, MinRes announced their plans to discontinue Yilgarn hub iron ore shipments through the Esperance port by December 31 — a move which would impact approximately 1,000 employees.
Ports authority ‘disappointed’
Southern Ports chief executive officer Keith Wilks said the authority was “extremely disappointed” to hear the announcement.
“While we don’t yet know the full effect for us, given Mineral Resources is a major customer for Southern Ports and the Port of Esperance, it is reasonable to assume this will have a significant impact on our operations,” Mr Wilks said.
“We will be working over the coming weeks with our staff and others to assess the situation more fully and put in place a plan to take us forward.
“We acknowledge the impact this will have on the Goldfields-Esperance region and our thoughts are with all of those directly affected.”
Yilgarn op ‘not financially viable’
MinRes managing director Chris Ellison said the company was to redeploy “as many people as possible” across the company’s other operations.
He said by the end of 2024, MinRes would have exported almost 45 million tonnes via the Port of Esperance and spent $4.2 billion running its Yilgarn operations.
“Having carefully considered all options, a comprehensive viability assessment confirmed continuity of the Yilgarn operations is not financially viable beyond the end of the 2024 calendar year,” Mr Ellison said.
He said this outcome had been influenced by several factors including the limited remaining mine life across five operating mines in the Yilgarn and the significant capital cost and lead time required to develop new resources to ensure continuity of supply.
‘Another door might open’
Maritime Union of Australia assistant branch secretary Jeff Cassar said it was too early to say how many direct jobs were likely to be affected as the result of MinRes pulling out of its Yilgarn operations.
“There is a whole process that needs to be worked out under the circumstances, and there are a variety of ways to mitigate the impact of this decision,” he said.
“What I can say, is that I understand this client’s business represents approximately 30 per cent of Southern Ports’ revenue across the board.
“Whilst this is definitely a significant impact viewed in a raw context, you need to consider that there may be potential to soften the blow to an extent, by implementing temporary measures such as voluntary conversion to part-time work, access to periods of unpaid leave, job-share etc.
“Where these arrangements can be facilitated by mutual agreement, they provide benefits to the business in that skills and experience are retained.”
Mr Cassar said when Southern Ports’ previous client Cleveland Cliffs Inc “pulled up stumps and walked away” from its Yilgarn operations, Southern Ports “packaged out” several of its employees in reaction.
“As a result, just months later, the port authority found themselves struggling to provide sufficient labour and expertise to hit the ground running when MinRes picked up where Cliffs had left off,” he said.
“It was all doom and gloom last time too, but it’s sometimes easy to forget that where one door closes another might open. There will be other players who have been seeking to move their product through the port but might have struggled to do so while MinRes has been prioritised for access.”
Mr Cassar said it was too early to say how much these other players might be capable of filling the void.
“But the key to avoiding a catastrophic hit to this region, in my opinion, will be for the State Government to use its influence to ensure the rail and other infrastructure can now be made readily available to these other players under conditions that are similarly favourable to those that have been extended to MinRes,” he said.
“Discussions between Southern Ports and the union are being arranged to commence within the next couple of weeks.
“Timing-wise, this bomb-shell announcement has fallen right in the middle of negotiations for a new enterprise agreement.
“Whilst there’s little doubt the news will complicate the bargaining process, there’s probably both positives and negatives associated with having to deal with the two processes concurrently.
“In any case, we are where we are now; there’s no point reflecting on how we got here.
“All our attention just needs to be turned to how we navigate through this situation.”
Community support ‘important’
Member for Roe Peter Rundle said he was hoping the potential redeployment of around 800 people that MinRes had spoken about would reduce the impact for many families and employees, of which some were based in Esperance.
“I think it’s just important that everyone helps and supports each other out,” he said.
“We have a six-month period until December 31 where MinRes will still be delivering four million tonnes through Esperance port; that gives people time to readjust.
“We also have another port user called Gold Valley which will be putting 1.5 million tonnes of iron ore through Esperance.
“Maybe this is an opportunity for different users of the port as well as the rail line to access port infrastructure.”
Mr Rundle said he would be in constant contact with MinRes executives to monitor the impact and keep informed as things progress.
