Eyre Infrastructure Project (Iron Road)

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Eyre Peninsula freight capacity
Priority Project
Location
Eyre Peninsula, SA
Geography
Small towns, rural communities and remote areas
Category
Regional Connectivity
Problem/Opportunity timeframe
Near term (0-5 years)
Proposed By
Iron Road Limited
Evaluation Date
27 July 2016

Opportunity

Iron Road Ltd, a publicly listed company, is proposing to develop an iron ore mine in South Australia’s Central Eyre Peninsula. The 2015 business case for this project expected the mine to produce 24 million tonnes per annum of 67% iron concentrate ore when operating at full capacity. The project would facilitate the transport of the ore from the mine to the coast, and its export through a deep-water port facility at Cape Hardy.

Project description

The 2015 business case proposed to develop a deep-water port at Cape Hardy, and a 148 km heavy-haul, standard gauge rail connection between the mine and the port. The proposed infrastructure would be available for other users (‘open access’), including grain exporters and other miners in the region. The new rail line could potentially be connected to the National Rail Network. Infrastructure Australia recommended the business case as a Priority Project, subject to the mine development proceeding.

The project is supported by the South Australian Government. In December 2019, the Australian Government committed $25 million towards developing and constructing the first stage of the Cape Hardy port.

The Australian Government notes the Cape Hardy project will bring together agriculture, mining, renewable hydrogen, green manufacturing and indigenous business into a multi-user, multi-commodity manufacturing and export hub in South Australia.

Economic, social and environmental value

Without the port and rail infrastructure, the economic activity associated with the mine, and the royalties and tax receipts expected to be derived from it, would not be realised.

The proponent’s stated benefit–cost ratio for the mine, rail and port infrastructure to Australia is 1.3, with a net present value of $3,800 million (7% real discount rate), representing a public net benefit for this privately funded project.

Capital cost of initiative as stated by proponent (2015 business case) $6 billion (real, undiscounted) | Private sector contribution $6 billion.