Jealousy rears its head in Pilbara

Lang Hancock, “Jealousy rears its head in Pilbara,”
Sunday Independent, October 13, 1974, p. 12.

In the past, Hancock and Wright have been prevented by a segment in the political field — because of personal bias — from forming a public company to sustain Australian equity in their projects.

Because of this, they have never had the opportunity to develop these projects under AUSTRALIAN ownership with AUSTRALIAN finance and with AUSTRALIAN knowhow. The position has become even more difficult with the Federal Government demanding 50 per cent Australian ownership and with the WA Premier saying to his colleagues that in no way would he allow Hancock and Wright to have a 50 per cent participation.

Judging by articles appearing the Press, a lot of the present pressure against the development of the first Hanwright project — Witenoom-Marandoo — is coming from the existing producers in the Pilbara.

Echoing the sentiments of the present producers, one correspondent writes: “It is difficult to understand why the Federal Government is lending its support to the Marandoo proposal.”

The reason should be obvious. Simply stated, it is because starting the Marandoo catalyst will bring greater benefit to Australia than any other project.

It would be a help to this country if the media would make sure of its facts before being led by the nose. Apparently the companies who have found Mr R.F.X. Connor sniping rebounding to their discredit are now using Hancock and Wright as their prime target. They are:

(a) attempting to throw doubt on the Australians’ ability to finance;

(b) trying to decry the merits of their downhill unified rail and port system;

(c) trying to undermine the reason why their project should be the “next cab off the rank.”

As far as (a) is concerned, much is made of their partnership agreement with Texasgulf. Let me quote from the Sydney Press: “It is also interesting that if Hancock and Wright is unable to raise its side of the finance required, Texasgulf has an option to take up the bulk of the shareholding. It would not be outside the realm of possibility for this to occur …”

No mention is made of the reciprocal clause of the case, in which Hancock and Wright has (as in any normal partnership) the right to take over Texasgulf’s half, if for some reason its finance is not forthcoming.

Regarding the advantages of (b) with its downhill gradient all the way, we are told that this only means a saving of some fuel, or that any rail line in the Pilbara can be built downhill if you do enough tunnelling.

They don’t mention that to achieve this downhill gradient on one of the existing lines, you would have to tunnel a total of 100 miles, against the 0.6 of ONE MILE of the Hanwright downhill railway. Nor do they mention that it requires four locos of 3000 hp each to pull 3/5ths of the load (and return the empties) that could be pulled over the proposed Hanwright railway by ONE loco of only 2000 hp.

Priority

Regarding (c); the reason why the Government has given Marandoo priority is because:

  • The downhill railway would inititially start at Wittenoom Marandoo, but ultimately it could transport some 90 per cent of the presently known ore in the whole of the Hamersley field over the shortest and cheapest route to deep water.
  • The deep hole that Hanwright have discovered near Ronsard, just east of Depuch, will enable land-backed berths to be ultimately built to service the area with 250,000-ton ships. At no other location on the coast from Maud’s Landing to Broome can this be done for anything like the same cost or at any cost that is in any way reasonable. Scribes advocating building artificial islands 30 miles offshore please note.
  • The Mons Cupri/Whim Creek copper venture, the TGI nickel venture and the vanadium venture which is awaiting development at this location are adjacent to this rail-port scheme. The first two of these will require a population of some 10,000 people. The first — the copper project 4 is almost ready to start. More work has to be done on the nickel to gauge the scale of the operation. Present indications are that the amount of rock mines could be about two thirds daily of that of Mt Isa. The vanadium can come in at a later date.
  • The fact that no doubt Wittenoom/Marandoo could soon be building a pellet plant (even though not a Government obligation) near Ronsard Island and if Robe River is to keep afloat it would be wiser to build its second plant at this location, because it would be totally uneconomic to draw ore from their Western Angela deposits (which the Government confiscated from Hanwright) except by linking up with Marandoo and our proposed downhill railway.
  • The fact that the power required for these positive operations in the Depuch locality is of the order necessary to sustain at least the smallest economic nuclear power plant, or an equivalent source of power. We think a nuclear power plant should in time be placed on Depuch Island to satisfy the “econuts” who have added enormously to the cost of nuclear power plants in the US by insisting that they be placed on costly artificial islands built for this purpose.
  • The fact that fresh water can be obtained there more readily that it can at Karratha for instance.
  • The fact that Hamersley would only have to build 35 miles of railway to use this secondary and bigger port and Newman build nothing means that the whole of the Pilbara rail system can be automatically linked without the taxpayer spending a farthing. It also means that if Port Hedland or Dampier suffer a break-down, the present producers would have an alternate outlet.

Research

This scheme of Hanwright’s has been researched to the extent of something like $4 or $5 million spent by Hanwright, and some $11 million spent by the various partners in the proving of ore and engineering studies.

Such expenditure serves to get the Government — State and Federal — off the hook regarding the very much publicised $6000 million “Pilbara Concept” which would require the Australian taxpayer to contribute some $3000 million in capital and the offshore oil companies to subsidise the Pilbara with gas at $4 million.

The State and Commonwealth Governments’ contributions to this $6000 million study concept are a mere $125,000 each. The contribution of the mining companies who are busy endeavouring to undermine Hancock and Wright’s project is nil, but the loss to WA if they are successful in stopping the Wittenoom-Marandoo project is enormous.

The public can rest assured that if the only thing stopping it is that Hancock and Wright are participants, the partners will not hesitate to sacrifice their holding.

At present, there are four major producers of iron ore and pellets in the Pilbara, all with varying degrees of foreign ownership and management. Much is made of these last two words in political circles by all political parties, the media and the public. Cries of anguish are loudest from those who will do the least about it.

The facts are — irrespective of who owns the mines or who manages them, their well-being and future is totally within the hands of foreign entities. Their very existence, their rate of expansion and everything connected with them depends entirely on ore sales.

In every instance, the “big fours” ore sales are under the entire control of the foreign partners in each enterprise in each case. The foreign partner has a sales contract for the entire output to the market, plus a heft sales commission.

If the detractors of Hancock and Wright with their “stop Marandoo” propaganda stopped to think of the full implication of this situation, they would then realise that if Marandoo (which is the catalyst for the bulk of the ore in the Pilbara because its transport facilities would bring in McCamey’s Monster, Rhode’s Ridge, the Angelas, Marillana, etc etc) doesn’t get going, then the whole of this ore would ultimately gravitate through the “areas of influence” policy of the WA Government to the “big four,” whose very existence depends on the rate of sales which are wholly in foreign hands.

If this transpires, then the Pilbara becomes totally under foreign domination forever.

Now the naive among you will say that the foreigners who control the output by way of their sales contracts would, for the sake of their commission, undoubtedly boost those contracts to the limit. A moment’s reflection will show that this is very far from the case, because in every instance, these foreigners have very much sharper axes to grind in disposing of their other minerals and interests well ahead of their holdings in Australian iron ore companies as the latter are merely a minor part of their multi-national empires.

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