Salvage plan for Pilbara crop project

Salvage plan for Pilbara crop project

Agribusiness
Water Minister Mia Davies (third left) and Agriculture Minister Ken Baston (far right) inspect the Woodie Woodie irrigation project on the edge of the Great Sandy Desert in March last year, soon after it started.

Water Minister Mia Davies (third left) and Agriculture Minister Ken Baston (far right) inspect the Woodie Woodie irrigation project on the edge of the Great Sandy Desert in March last year, soon after it started.

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URGENT negotiations last Thursday may have salvaged a Pilbara irrigated fodder project threatened by the closure of a mine supplying water.

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URGENT negotiations last Thursday may have salvaged a Pilbara irrigated fodder project threatened by the closure of a mine supplying water.

The future of the Woodie Woodie project depends on a formal contract being drawn up and the Department of Agriculture and Food (DAFWA) agreeing to fund diesel fuel to keep a mine dewatering pump operating.

Located on Warrawagine cattle station on the edge of the Great Sandy Desert 170 kilometres east of Marble Bar, the $4.1 million Royalties for Regions-funded project is about half way through its two-year projected life.

It is part of a broader four-year $12.5m Pilbara Hinterland Agricultural Development Initiative (PHADI) assessing the potential of irrigated agriculture.

A 10,000 head cattle feedlot and exploring on-farm processing opportunities such as stock feed pellets, was suggested as a possible second stage, along with improving crop production and infrastructure systems and new markets development.

The RfR funds provided pumps to bring water from a creek fed by mine dewatering, a computer-controlled fertigator to add nutrients and a 38 hectare centre pivot irrigator.

Piggybacked on the DAFWA project, Warrawagine Cattle Company funded two more pivots.

It had plans to extend the pastoral diversification permit for the project out to 12,000ha and cultivate 2000-3000ha using up to two-thirds of the 63 gigalitres a year the mine is licensed to pump into tributaries of the Oakover River.

So far the Woodie Woodie project has produced two lucerne crops cut for hay for Warrawagine from one pivot and a promising 220 big bales of Rhodes grass hay from a quarter quadrant of a second pivot.

Sowing a third pivot area was about to begin after three months of delays caused mainly by technical troubles related to unreliable phone and internet reception and slow data uploads causing a rethink of plans to remote control the pumps and fertigator.

The project has already proved sorghum as a viable Pilbara crop and trialling of perennial grasses, tropical legumes, oats and maize was continuing, grown with fresh water pumped out of nearby manganese mine pits.

But on Tuesday last week mine owner Consolidated Minerals Ltd, known as ConsMin, turned the dewatering pumps off, suspended operations and placed Woodie Woodie mine into care and maintenance for an indefinite period.

About 130 employees and 50 contractors on site and at ConsMin's West Perth headquarters were made redundant.

ConsMin, a private company owned by Ukrainian billionaire Gennadiy Bogolyubov, said only a small "caretaking and support team" would be retained at Woodie Woodie mine.

It blamed record low prices for manganese ore for the shutdown.

"Despite relentless cost-cutting and marketing efforts to remain competitive, the price for manganese ore is now so low that in the board's view, continuing to operate at Woodie Woodie is no longer economically viable," it stated.

Manganese is used in steel production and ConsMin supplies about 20 per cent of the imported manganese used by Chinese steel mills, with about half coming from Woodie Woodie.

The sudden slowdown in China's economy has slashed domestic and international demand.

Worldsteel estimates Chinese steel output will drop to 672.2 million tonnes this year, compared to 685.9mt last year and 710.8mt the previous year.

Price trajectory of manganese has copied iron ore, plunging from more than $4 per kilogram early last year when ConsMin joined the Woodie Woodie project, to $1.80/kg this year.

Apart from turning off water to the irrigation project, the mine closure also stopped an associated private biofuel project.

AgGrow Energy, which is managing the Woodie Woodie project, had planned to incorporate a bio-digester on site to produce biofuel or compressed natural gas from irrigated crops.

It proposed a real-world test of the technology by replacing diesel fuel with biofuel or gas to run de-watering pumps and generate electricity for the irrigators and fly-in fly-out mine camp which had housed up to 500 people.

On Thursday Robin Mills, Warrawagine, Chris Schelfhout and Vicki McAllister, DAFWA, Lawrence Kirton and Craig Palmer, AgGrow, and a Department of Regional Development representative met with ConsMin in Perth.

There was informal agreement on a proposal that could see one de-watering pump operated by mine care-taking staff to maintain a flow into the creek from where the project draws water.

But the agreement is conditional on DAFWA funding the fuel to run the pump.

Mr Mills said later the meeting was amiable and ConsMin was "very co-operative" in attempting to find a way to salvage the project.

"Basically they've said that if DAFWA will pay for the fuel, they will turn one pump back on," he said.

"That will give us about 120 megalitres which is a bit more than enough to run two of the irrigators.

"We'll have to see now whether DAFWA can fund the fuel."

Mr Kirton said he was disappointed the alternative fuel trial was unlikely to take place at Woodie Woodie, but stressed it was not the end of that project.

"There are alternative sites and mines in the Pilbara where we can do it,'' he said.

"We are already in conversations with a number of interested parties."

Dr Schelfhout said on Monday negotiations between DAFWA and ConsMin were continuing.

"At this stage we don't have an indication of what the likely fuel cost of running one pump will be, but we should have that within a week and we'll be able to asses that option," said Dr Schelfhout, DAFWA's Woodie Woodie project manager.

If the cost looked like being "unsustainable over the longer term" the Woodie Woodie project should be able to continue until the March-April cropping season is completed, he said.

An assessment of options would be made then.

The necessity to de-watering the mine pits proved the existence of a "big and underlying water resource" which could be tapped by bores, Dr Schelfhout said.

He said the results of the project so far had been pleasing.

"The Rhodes grass and Sorghum yields have been good, although the quality hasn't been A grade," he said.

Dr Schelfhout said he was confident crop quality could easily be improved by working up the soil.

In December an independent analysis of PHADI options suggested a staged development of irrigated agriculture with the initial stage being low-risk fodder crops for export from Port Hedland.

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