Duncan Calder of Contour Capital, Perth, Australia

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DUNCAN CALDER ON THE 2019 NEW YEARS RESOLUTION
THAT GERALDTON WANTS TO HEAR
Duncan Calder - At this time of the year, we each
tend to reflect on our lives and make resolutions
about what we want to change in the New Year.
The people of the Mid West Region of Western
Australia may well be hoping that Western
Australian Minister Alannah MacTiernan makes her
2019 New Years Resolution to be to Make Oakajee
Happen.
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When Duncan Calder, Managing Director of Contour
Capital, advised the Geraldton Port Authority
some years ago, he was blessed to be mentored by
the former WA Premier, the Hon Richard Court AC.
Richard consistently provided Duncan with sage
advice that he always accepted.  Always except
once.  Richard warned him that deepening the
access channel at Geraldton Port would mean that
a deep water port at Oakajee would never be
developed. Duncan disagreed, believing that a
deeper Geraldton Port would, in fact, be an
incubator for the iron ore industry that would
grow and be a catalyst for the strategically
critical Port of Oakajee to be developed at a
later date.  Until recently he remained
confident that he was right and that the former
Premier was wrong.  However, with Mt Gibsons
hematite iron ore exports through Geraldton at an
end, with the ability to use wider 90,000 ton
vessels being introduced by.
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Ansteel for its Karara production and with the
cap on iron ore exports through Geraldton being
lifted, there appears to be a reduced sense of
urgency for Oakajee to be developed.  Duncan now
fears that there is increased potential for the
next Mid West iron ore project to be funnelled
through Geraldton Port rather than becoming a
badly needed foundation customer for Oakajee
Port.  WA needs a visionary leader to ensure that
emerging projects are a catalyst for an Oakajee
Port that can accommodate far more than just one
new project an Oakajee Port that can truly open
up the Mid West. Minister MacTiernan, arguably
Western Australias first politician since the
great Sir Charles Court with a visionary
commitment to opening up the state, was the
minister responsible for the last great projects
that breathed life into Geraldton and the Mid
West.  Visitors to Geraldton now see its
beautiful foreshore. But it was not always so. 
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Many of us remember the glorious ocean view being
constantly blocked out by a kilometre plus long
grain train along the full length of the
foreshore. It was Alannah MacTiernan who had the
vision to transform Geraldton through the game
changing projects to build the citys southern
transport channel and deepen the ports access
channel and inner harbour.  Duncan Calder worked
for three years with the then Geraldton Port
Authority to compile a powerful and robust
business case for these projects, but the Under
Treasurer was committed to blocking them and
Treasurer Eric Ripper was falling into line
behind that view.  It was Alannah MacTiernan as
Minister for Infrastructure who stepped up and
forced through the projects and Geraldton has
profited ever since. That takes bold action and
leadership. Now the development of a deepwater
port at Oakajee would be the game changing
project that can fully open up the MidWest and
bring the momentum that is needed to lift the Mid
West out of the doldrums. But it needs a
visionary to make it happen.
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It needs bold action.  It needs MacTiernan. Last
month W.A. Premier Mark McGowan quietly
reshuffled his cabinet. There wasnt much media
coverage, but critically, MacTiernan picked up
the Ports portfolio. This appointment may just be
the change needed to bring Oakajee back into
focus, back onto the political agenda. Most of
us have seen the movie Jerry Maguire and recall
Cuba Goodings iconic line to Tom Cruise Show
me the money!   Whenever proponents seek to
promote discussion about the Port of Oakajee with
the WA Government they receive a similar line
Show me the mines!  The logic behind this
position seems reasonable on the face of things.
Nobody wants a white elephant port development
that has no users, even if the investment funds
all come from offshore.  Nobody in Government
wants to be associated with yet another failed
attempt to promote Oakajee.
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There appears to be a growing lack of confidence
in the WA Government bureaucracy that the Mid
West Region will become a 100 million ton per
annum iron ore province.  This is odd, given that
China, the end customer for the high quality
magnetite ore that the Mid West will deliver,
remains convinced of this great potential. This
current fear-driven mentality misses the point. 
It means that W.A. may allow itself to be
satisfied with one modest new project in the Mid
West rather than allowing the full potential of
the region to be achieved.  This fear-driven
mentality fails to recognise that the potential
miners in the region are not going to create or
refresh business feasibility studies whilst
Government interest in Oakajee is so fear
fuelled. There is no shortage of potential iron
ore mine customers in the Mid West both to the
north of Oakajee and to the south and east. An
infrastructure led solution is needed to spark
renewed investment by miners.
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Everyone in the Mid West and in the WA Government
recognises that China has spent around 5billion
in compiling its mining project interests in the
MidWest and that these large investments are
largely stranded without a deep water port and
that a port at Oakajee is simply not feasible
without Chinas financial support. Moreover, the
owners of these mines have made it clear that
further investment in the mining projects in the
Mid West to crystallise resource upside will not
happen without hope and belief that a deep water
port export pathway will be established and is
supported and encouraged by the WA
Government. As President of the Australia China
Business Council for a decade, Duncan developed
close relationships with Chinas WA business and
diplomatic leaders.  There is no doubt that the
current poor state of the Sino-Australian
political relationship and the strong anti-China
rhetoric emerging from Canberra fuelled by China
hawks in the Australian and US defence sectors is
a substantial challenge to collaboration on a
major infrastructure project.
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So does this all mean that Minister MacTiernan
should put Oakajee in the too hard
basket? Absolutely not! We need bold action and
we should not lose sight of the positive factors
that underpin the reason why Oakajee has been
long considered to be a critically important
project for the development of WA.  These
include The Mid West still matters enormously
to China, given its massive investment to date
and its view that the region is a potentially
huge resources province The importance of
magnetite iron ore is growing ever stronger along
a positive long term trajectory. The importance
of this higher grade is reflected in the premium
price that is paid by the Chinese steel
mills China has massive experience in major
infrastructure projects and possesses the
construction and financial muscle that is
essential to delivering the innovative
infrastructure solutions that could open up the
Mid West.
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We have recently seen a number of early stage
infrastructure proponents emerge seeking to bring
Oakajee back into focus. These can be an
invaluable conduit to re-igniting Chinese
interest in developing critical port and rail
infrastructure in the Mid West.  They need to be
encouraged, not discouraged. Oakajee is a
critically important project that has suffered
and been delayed as a result of bad decision
making in the past lets hope that Minister
MacTiernan will again provide the bold visionary
leadership that we need to ensure that history
does not repeat itself.  Lets hope Oakajee
becomes her 2019 NY resolution.
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Source Link http//duncancalder.com/2019/01/03/du
ncan-calder-on-the-2019-new-years-resolution-that-
geraldton-wants-to-hear/ Thanks for
Watching Duncan Calder PO Box 1431, South Perth
WA 6951 duncan.calder_at_manna.org.au https//www.man
na.org.au/