Port prospects depend on coal shipping costs

Press, 12 May 1984, Page 3

Port prospects depend on coal shipping costs

Prospects of building a deep-water port on the West Coast depend almost entirely on shipping coal at a low cost, according to a study on West Coast resources. Low cost transport was needed because markets were not growing at forecasted rates and prices were reverting to the levels which had prevailed before the comparatively recent oil shocks, the report said. The report was compiled by the McDermott Associates, planning development consultants, of Auckland, for the West Coast Regional Port Investigating Company, Ltd. It was concerned with the resources which might make use of a West Coast deep-water port, the prospects and conditions for their development, and the timing of developments. Coal was confirmed as the best prospect for substantial resource-based ex-

ports from the West Coast. Forestry and related industries, including beech chips, ilmenite, and cement were other resources which might be developed if a port was available. Investigations showed that the expansion of the Buller exports of coking coal, and the development of the Rapahoe sector of the Greymouth field, the nearby Mount Davey sector and the Pike River field could lead to more than four million tonnes of export coal annually from the West Coast. “This level of exports is considered highly optimistic. On investment and planning grounds it is considered highly unlikely that it could be achieved before the turn of the century,” the report said. “From a market point of view it would require the penetration of highly competitive world steaming coal markets with a resource which is expensive to mine.”

Substantial development was unlikely before the mid-19905. “A softening of prices and the likelihood that a buyers’ market will prevail during most of the 1980 s mitigate against any of the prospects proceeding at an early date,” the report said. The provision of port facilities would not, in itself, be sufficient to bring about the development of other resources. Future investigation of resource based export projects, their potential for development and their transport needs should be assessed on a project-by-project basis, the report concluded. Nearly 400,000 tonnes of cement could be shipped from a port at Westport if international prices improved markedly or if North Island demand increased. If beech chip market conditions improved so that a substantial trade could be economically justified, and

environmental concerns did not preclude such a development, a chipping facility could be established near Westport and, or, Greymouth, to complement the existing one at Nelson. However, the high volume, low value nature of the product made this debatable, the report said. In the long term up to 10,000 tonnes of titanium pigment could be exported, most likely based on the beach sands south of Westport around Barrytown. A plant could not be established before the early--19905. Low value iron oxide shipments were also possible, said the report. If multi-purpose facilities existed on the West Coast, other ventures might be expected to use them depending on shipping arrangements. These activities could include manufactured products, farming, fishing, and the collecting and packing of sphagnum moss.