State Agreement to facilitate new multi-user rail and port infrastructure in Pilbara

11/11/04
Premier Geoff Gallop today signed a State Agreement to facilitate the development of new $1.4billion multi-user railway and port facilities in the Pilbara.
The Railway and Port (The Pilbara Infrastructure) Agreement is between the State, Fortescue Metals Group (FMG) and The Pilbara Infrastructure (TPI), a wholly-owned subsidiary of FMG.
The agreement will be entered into State Parliament this week, with a view to having it passed by the end of the Parliamentary session.
Under the agreement, TPI proposes to construct a 520km multi-user railway from iron ore deposits in the eastern and central Pilbara to Port Hedland and to develop additional multi-user facilities at the port.
"The multi-user railway and port facilities to be developed under the TPI Agreement would open the Pilbara iron ore industry to new entrants seeking to supply growing international demand for iron ore, especially from China," Dr Gallop said.
"TPI's plans could see the value of iron ore exports from the Pilbara increase by more than $1billion a year and the Gallop Government is keen to support this expansion in response to customer demands for diversified sources of iron ore supply.
"This is a welcome advance for Western Australia's iron ore industry and will help the Pilbara capitalise on continuing strong global iron ore demand, build industry capacity and increase the State's share of the world iron ore market."
The Premier said the agreement was consistent with the Government's efforts to develop the resources sector to underpin the record levels of business investment in WA over the last four years and further reduce WA's unemployment rate from 4.7 per cent, the lowest on current records.
He said since coming to office, the Gallop Government had worked with all WA iron ore participants to grow the industry by both supporting existing operations and facilitating new investment.
State Development Minister Clive Brown said the railway and port developments would employ 1,500 people during the construction phase and provide ongoing jobs for 225 people, mainly in Port Hedland.
Mr Brown said the agreement was consistent with the Government's vision for the Pilbara iron ore industry and with long-established practice for iron ore projects to proceed under State Agreements. The TPI Agreement also contained local content provisions to ensure that local suppliers benefited from the $1.4billion investment.
"This agreement also breaks new ground because it contains provisions to promote the Government's sustainability objectives," the Minister said.
"It requires the company to consult with local authorities and regional communities and agree to a community development plan before the State will consider proposals under the agreement."
The community development plan would outline the company's obligations in relation to training and employment for people living in the region; regional employment and procurement; contribution to community services and facilities; and commitment to a regionally based workforce.
"The community development plan would ensure that development under the TPI agreement included plans for managing social impacts and maximising benefits to local communities," Mr Brown said.
The Minister said another aspect of the agreement that set it apart from previous iron ore agreements was that it provided for the railway to be subject to the Railways Access Act and for open access to port facilities.
"The rail and port access arrangements are an important step forward in opening the Pilbara iron ore industry to potential new investors by reducing barriers caused by the high cost of infrastructure," he said.
"WA's reputation as a reliable and competitive supplier of iron ore can only be enhanced by developments such as this, which will provide an efficient transport and export service to prospective new iron ore mines and give our overseas customers more choice."
Office of the Premier - 9222 9475
Office of the Minister for State Development - 9222 9699