Delay to Utah Point sale will hit WA deficit
The Barnett Government will go to the State election with a key plank of its debt-repayment plan missing after WA Treasurer Mike Nahan last week conceded the sale of Port Hedland’s Utah Point facility would not happen before the March poll.
The Government was last week preparing to re-introduce legislation to allow the privatisation of the port, which is used by junior Pilbara miners Atlas Iron, Mineral Resources and Consolidated Minerals, into the Legislative Council.
The laws passed the Lower House but Upper House Nationals WA and Labor MPs joined forces to send the Bill to a committee for review.
The parliamentary committee recommended changes to protect the junior miners amid fears a private operator would “prioritise profit over the facilitation of trade”.
“The committee’s view is that the primary role of Utah Point has historically been to encourage the development of junior miners in Western Australia and that this role is ongoing and should be maintained,” the report said.
Dr Nahan pledged to amend the legislation to “further strengthen the access and pricing regime” for the sale.
“While the existing access and pricing regime referenced in the Bill offers strong protections for junior miners, the Government will be proposing changes to the access and pricing regime to provide a further layer of protection,” he said.
“The Government will be proposing an amendment to provide a further layer of protection to junior miners, particularly targeting the hypothetical situation where a junior miner is unable to use capacity at Utah Point due to prevailing economic conditions but subsequently seeks to recommence exports.”
Dr Nahan said the access regime would be changed to ensure at least half of the facility’s capacity was always available to the junior miners.
That flexibility would not mean a private operator would lose the right to operate at 100 per cent capacity because the operator would be able to sign new contracts with other exporters — but only on terms that ensured at least 50 per cent of capacity could be quickly freed for junior miners.
“I am confident this maintains a balance between the efficient use of the facility while ... ensuring that junior miners have an ability to access the facility ...,” Dr Nahan said.
“The proposed sale of Utah Point will be completed after the March election.”
The sale was expected to net $500 million.
The Government hopes a different pricing model will alleviate concerns raised by the competition watchdog about price-gouging.
“Prices would be included as a matter which may be subject to binding arbitration in the same way that other terms of access are — prices will be negotiated between the parties with binding independent arbitration in the case parties cannot agree,” Dr Nahan said.