GRAIN producers across South Australia’s Eyre Peninsula are watching with interest the news of a new grain export port in the region, but say it will be a long time before they see any benefits in terms of reduced supply chain costs.
Darren Arney, chief executive of Grain Producers South Australia, welcomed Emerald Grain’s proposed development at Cape Hardy, saying all competition was welcomed by growers, but cautioned there was a significant period of time before any site was operational.
He said the port would only go ahead if mining business Iron Road, who has developed the Cape Hardy proposal, got its Central Eyre iron ore project up and running.
“They (Iron Road) still need to get the mine approved by government and funded before any of this can go ahead,” he said.
But he said this was not the only obstacle to overcome before Iron Road had a workable business model.
“Then they have to get farmer approval on where the mine is proposed at Warramboo (in the middle of the EP) and where the rail corridor is proposed to Cape Hardy.”
At present, the South Australian government is supportive of the Iron Road proposal.
For his part, Emerald Grain managing director John Murray said he believed the port facility would go ahead.
“It’s true our proposal relies on Iron Road developing facilities, but they have got all their applications for regulatory approval in and it is progressing well,” he said.
“From our end, once Iron Road is ready to go, it will take us about 18 months to build our port facility.”
Mr Arney also said growers were looking at what the Emerald Grain port would look like in terms of a supply chain.
“GPSA have also been calling for an independent review of supply chain costs, through ESCOSA (Essential Services Commission of South Australia), to understand the freight task required to get grain to port,” he said.
Mr Murray said Emerald Grain would primarily be targeting grain from within road freight catchment zone, with a view to potentially take grain along the Warramboo rail corridor.
He said he was confident the company could pass on significant supply chain cost savings to growers in comparison to Viterra, the operator of the existing Port Lincoln grain export terminal.
“The site will be new and efficient as will the rail network.
“We’re talking about a train line with serious capacity to take large tonnages of iron ore, we will have the ability to put together large trains of grain, which will reduce costs.”
Mr Arney said growers were against any further levies to fund infrastructure.
“Many growers feel they are already paying infrastructure levies through GWA (Genessee Wyoming Australia, which owns rolling stock and rail infrastructure on the EP) and Viterra and don’t want to pay twice,” Mr Arney said.
Meanwhile, plans for a rival port at Lucky Bay, put together by Sea SA and miner Iron Clad remain on track, in spite of the Cape Hardy proposal.
Some work has already been undertaken on the Lucky Bay site.