Much of the infrastructure at Port Hedland is colored with rust, which makes sense given its role as one of the premier iron ore loading terminals in the world. Supplied by rail from four of the largest producing mines in Western Australia, operations at Port Hedland cause reverberations throughout global iron ore markets.
Australia’s economy has benefitted as China’s demand for mineral resources saw the price for commodities such as iron ore and coal skyrocket; even with Australia’s high labor costs, strong environmental regulations and geographic isolation, the infrastructure and efficiency at Port Hedland—coupled with the sheer volumes of ore—make it difficult for anyone else in the world to compete.
Indeed, even with the downturn in global commodity prices, as long as Port Hedland continues operations, smaller (even if cheaper) producers will continue to struggle to find space in global markets.
And there is little incentive for Port Hedland to slow down operations, even if China’s economy is cooling. Growth in regional markets like Southeast Asia are poised to offset some of Chinese slowing, and Port Hedland’s is geographically positioned to fuel ASEAN’s growth.