Changing the Game for South Australia’s Resource Sector by the Addition of Capesize Capable Ports
Thomas Bain Butchart BEng (Mech), MBA
Project submitted in partial fulfilment of the requirements for the degree of MSc (Energy and Resources), UCL School of Energy and Resources, Australia
Economies of scale matter in the realm of global trade for commodities such as iron ore. Producers of iron and steel are constantly on the lookout to lower the delivered cost of their key production inputs, namely iron ore and coal. Through the use of capesize vessels, colloquially known as the gravel trucks of the sea, the cost-per-distance travelled for each tonne is far less than that of other comparable methods. This thesis evaluates the existing infrastructure’s ability to cope with a project such as the proposed Port Spencer mine-port project in South Australia. It then assesses projects globally that are similar elucidating how their commercialisation model can be used to assist the Port Spencer project’s success. World trends in port development, steel production and the needs of stakeholders affected by such a significant project are then reviewed. The thesis then develops and proves the robustness of this project’s financial model. It does so in a tripartite manner. Firstly, through developing the financial milestones and metrics that need to be met. Secondly, by a comprehensive sensitivity analysis with recommendations for a risk mitigation strategy. Thirdly, by qualifying and quantifying the roadblocks to commercial success and methods for their deletion. Conclusions and recommendations are then given for future research to modify the specificity of the findings to a user group’s needs.