Eyre Peninsula Cooperative Bulk Handling signed a Memorandum of Understanding with Iron Road Limited last week to forge ahead and advance the development of a new grain handling business with export facilities at Cape Hardy near Tumby Bay.
The partnership came about after Iron Road received a mining lease and development approval for a $4.5- billion project in May.
The MoU was agreed upon to help develop a new grain distribution and supply chain network using Iron Road’s planned rail and port facilities.
Iron Road managing director Andrew Stocks welcomed the partnership with EPCBH and said the Central Eyre Iron Project would benefit the broader region beyond the mining operations.
"We look forward to working with the cooperative and others to leverage the relative strengths of our industries and advance this project," Mr Stocks said.
“We believe the development of multi-user facilities with cross commodity access, such as grain, will open up substantial additional export and import opportunities, and maximise benefits at regional and state levels,” he said.
”We operate on a principal of third party infrastructure access. Bearing in mind that the proposed CEIP operations are located within an established region, it is fitting that our earliest agreements are with that sector.”
The pair will work collaboratively to establish a grains export business using the multi-commodity port.
EPCBH spokesperson Bruce Heddle said reducing supply chain costs and providing growers with access to an efficient, and lower cost path grain market, was the group's aspiration.
"Most growers accept we lack grain storage and handling competition in SA but it is more than that," he said.
"There are infrastructure challenges because it is relatively toward the end of its depreciating life, and at some point if the state is to remain competitive on the world stage, some investment needs to be made somewhere."
Mr Heddle said the MoU had set the rules of a relationship between the organisations, from which to negotiate the project’s future.
He said it created a foundation for the graingrowers group to inform Iron Road of what is needed to make it a viable venture for the region.
“SA’s grain industry is relatively small compared with tonnage needed to make a port facility competitive and efficient, but with a mining facility that could turn out 10-15 million tonnes a year it is sufficient to make the model work,” he said.
Experts to define project’s potential
A $210,000 federal government grant through the Farm Co-operatives and Collectives Pilot Program (Farming Together) was used to develop a project business case to fund a feasibility study requested by the Eyre Peninsula Cooperative Bulk Handling group.
EPCBH spokesperson Bruce Heddle said it was the logical step forward for the project because “there is no point following just a dream.”
"The study is to clearly define the opportunity of the facility and put hard numbers around it,” he said.
"The amount of capital required to make a genuine facility needs to be defined, we need to nail down potential tonnages, profit streams, cost structure and potential partnerships to find the skill set needed to run the facility.”
