DUNCAN CALDER ON THE 2019 NEW YEAR’S RESOLUTION THAT GERALDTON WANTS TO HEAR

At this time of the year, we each tend to reflect on our lives and make resolutions about what we want to change in the New Year.  The people of the Mid West Region of Western Australia may well be hoping that Western Australian Minister Alannah MacTiernan makes her 2019 New Year’s Resolution to be to “Make Oakajee Happen”.

When Duncan Calder, Managing Director of Contour Capital, advised the Geraldton Port Authority some years ago, he was blessed to be mentored by the former WA Premier, the Hon Richard Court AC. Richard consistently provided Duncan with sage advice that he always accepted.  Always… except once. 

Richard warned him that deepening the access channel at Geraldton Port would mean that a deep water port at Oakajee would never be developed. Duncan disagreed, believing that a deeper Geraldton Port would, in fact, be an incubator for the iron ore industry that would grow and be a catalyst for the strategically critical Port of Oakajee to be developed at a later date. 

Until recently he remained confident that he was right and that the former Premier was wrong. 

However, with Mt Gibson’s hematite iron ore exports through Geraldton at an end, with the ability to use wider 90,000 ton vessels being introduced by Ansteel for its Karara production and with the cap on iron ore exports through Geraldton being lifted, there appears to be a reduced sense of urgency for Oakajee to be developed. 

Duncan now fears that there is increased potential for the next Mid West iron ore project to be funnelled through Geraldton Port rather than becoming a badly needed foundation customer for Oakajee Port.  WA needs a visionary leader to ensure that emerging projects are a catalyst for an Oakajee Port that can accommodate far more than just one new project; an Oakajee Port that can truly open up the Mid West.

Minister MacTiernan, arguably Western Australia’s first politician since the great Sir Charles Court with a visionary commitment to opening up the state, was the minister responsible for the last great projects that breathed life into Geraldton and the Mid West.  Visitors to Geraldton now see its beautiful foreshore. But it was not always so.  Many of us remember the glorious ocean view being constantly blocked out by a kilometre plus long grain train along the full length of the foreshore.

It was Alannah MacTiernan who had the vision to transform Geraldton through the game changing projects to build the city’s southern transport channel and deepen the port’s access channel and inner harbour. 

Duncan Calder worked for three years with the then Geraldton Port Authority to compile a powerful and robust business case for these projects, but the Under Treasurer was committed to blocking them and Treasurer Eric Ripper was falling into line behind that view.  It was Alannah MacTiernan as Minister for Infrastructure who stepped up and forced through the projects and Geraldton has profited ever since. That takes bold action and leadership.

Now the development of a deepwater port at Oakajee would be the game changing project that can fully open up the MidWest and bring the momentum that is needed to lift the Mid West out of the doldrums. But it needs a visionary to make it happen.  It needs bold action.  It needs MacTiernan.

Last month W.A. Premier Mark McGowan quietly reshuffled his cabinet. There wasn’t much media coverage, but critically, MacTiernan picked up the Ports portfolio. This appointment may just be the change needed to bring Oakajee back into focus, back onto the political agenda.

Most of us have seen the movie “Jerry Maguire” and recall Cuba Gooding’s iconic line to Tom Cruise – “Show me the money!”  

Whenever proponents seek to promote discussion about the Port of Oakajee with the WA Government they receive a similar line – “Show me the mines!” 

The logic behind this position seems reasonable on the face of things. Nobody wants a white elephant port development that has no users, even if the investment funds all come from offshore. 

Nobody in Government wants to be associated with yet another failed attempt to promote Oakajee.

There appears to be a growing lack of confidence in the WA Government bureaucracy that the Mid West Region will become a 100 million ton per annum iron ore province.  This is odd, given that China, the end customer for the high quality magnetite ore that the Mid West will deliver, remains convinced of this great potential.

This current fear-driven mentality misses the point.  It means that W.A. may allow itself to be satisfied with one modest new project in the Mid West rather than allowing the full potential of the region to be achieved.  This fear-driven mentality fails to recognise that the potential miners in the region are not going to create or refresh business feasibility studies whilst Government interest in Oakajee is so fear fuelled. There is no shortage of potential iron ore mine customers in the Mid West – both to the north of Oakajee and to the south and east. An infrastructure led solution is needed to spark renewed investment by miners.

Everyone in the Mid West and in the WA Government recognises that China has spent around $5billion in compiling its mining project interests in the MidWest and that these large investments are largely stranded without a deep water port and that a port at Oakajee is simply not feasible without China’s financial support.

Moreover, the owners of these mines have made it clear that further investment in the mining projects in the Mid West to crystallise resource upside will not happen without hope and belief that a deep water port export pathway will be established and is supported and encouraged by the WA Government.

As President of the Australia China Business Council for a decade, Duncan developed close relationships with China’s WA business and diplomatic leaders.  There is no doubt that the current poor state of the Sino-Australian political relationship and the strong anti-China rhetoric emerging from Canberra fuelled by China hawks in the Australian and US defence sectors is a substantial challenge to collaboration on a major infrastructure project.

So does this all mean that Minister MacTiernan should put Oakajee in the “too hard basket”?

Absolutely not!

We need bold action and we should not lose sight of the positive factors that underpin the reason why Oakajee has been long considered to be a critically important project for the development of WA.  These include:

  • The Mid West still matters enormously to China, given its massive investment to date and its view that the region is a potentially huge resources province
  • The importance of magnetite iron ore is growing ever stronger along a positive long term trajectory. The importance of this higher grade is reflected in the premium price that is paid by the Chinese steel mills
  • China has massive experience in major infrastructure projects and possesses the construction and financial muscle that is essential to delivering the innovative infrastructure solutions that could open up the Mid West.

We have recently seen a number of early stage infrastructure proponents emerge seeking to bring Oakajee back into focus. These can be an invaluable conduit to re-igniting Chinese interest in developing critical port and rail infrastructure in the Mid West.  They need to be encouraged, not discouraged.

Oakajee is a critically important project that has suffered and been delayed as a result of bad decision making in the past; let’s hope that Minister MacTiernan will again provide the bold visionary leadership that we need to ensure that history does not repeat itself.  Let’s hope Oakajee becomes her 2019 NY resolution.

Media Contact
Company Name: Contour Capital
Contact Person: Duncan Calder
Email: Send Email
Phone: 61 439 299 817
Country: Australia
Website: http://contourcapital.com.au/

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