Port Hedland has a natural deep anchorage harbour which, as well as being the main fuel and container receival point for the region, was seen as perfect for shipment of the iron ore being mined in the ranges located inland from the town. The ore is moved by railway from four major iron ore deposits to the east and south of Port Hedland area. In August 2010 the port exported 13.6 million tonnes of iron ore. In March 2016 a new monthly record of 39.6m tons was set.
Other major resource activities supported by the town include the offshore natural gas fields, salt, manganese, and livestock. Grazing of cattle and sheep was formerly a major revenue earner for the region but this has slowly declined. Port Hedland was also formerly the terminus for the WAGR Marble Bar Railway which serviced the gold mining area of Marble Bar. Located between Port Hedland and South Hedland are the large salt hills of Dampier Salt, a subsidiary of Rio Tinto. These large mounds have almost become a tourist attraction in their own right.
Port Hedland is known by the Indigenous Kariyarra and Nyamal people as Marapikurrinya, which either means "place of good water" (as told by a Nyamal language speaker) and makes reference to the three reliable fresh water soaks that can still be seen in and around the town, or as the town council's website says "refers to the hand like formation of the tidal creeks coming off the harbour (marra - hand, pikurri - pointing straight and nya - a place name marker)". According to Dreamtime legend there was a huge blind water snake living in the landlocked area of water known as Jalkawarrinya. This landlocked area is now the turning basin for the ships that enter the port and as the story goes, "the coming of the big ships meant it was unable to stay".
The coastline in the area was seen by European mariners as early as 1628, when the Dutch merchant ship Vianen, captained by Gerrit Franszoon de Witt visited.
Swedish-born mariner Peter Hedland was the first European to note the harbour's existence and the possibility of using it as a port. Peter Hedland arrived in the area in April 1863 onboard his boat, Mystery that he had built himself at Point Walter on the banks of the Swan River. He named the harbour Mangrove Harbour and reported that it would make a good landing site with a well protected harbour and that there was also fresh water available. However, the port was initially regarded as unusable, due to a sandbar that frequently sealed the entrance, thick mangroves round the shore and the narrow entrance made the harbour difficult to enter in bad weather.
In 1866, the Government Resident at Roebourne, Robert John Sholl directed Charles Wedge to re-examine Port Hedland as an alternative port since, because the distance from Tien Tsin Harbour (later known as Cossack) was discouraging settlement in areas such as the De Grey River. Wedge encountered difficulties in his efforts, as he was hampered by heavy rain and the tidal creeks around Mangrove Harbour and was unable to reach the proposed port site to survey its suitability.
In 1891, exploration of the area by Tom Traine, John Wedge (son of Charles Wedge) and Syd Hedley identified two landings and described the harbour as "pretty as well as safe". In September 1895, Cossack residents requested the District Surveyor survey the headland at Port Hedland in order to establish a town and requested the Government build a jetty.
In 1896, the Port Hedland town site was surveyed by government surveyor E.W. Geyer, who named the grid of streets after the pastoral pioneers including Richardson, Withnell, Wedge and McKay streets, and in October 1896 the town site was gazetted.
By 1905, the Roads Board had made considerable improvements to the roads and streets.
The population of the town in 1968 was about 3,000 people.
Goldsworthy Mining developed an iron ore mine approximately 100 kilometres east of Port Hedland in the early 1960s and built the towns of Goldsworthy and later Shay Gap as mine sites. A rail line was then built to Port Hedland where dredging was undertaken to deepen and widen the port's channel and a wharf was built opposite the township of Port Hedland on Finucane Island. Shipment of ore began on 27 May 1966 when the Harvey S. Mudd sailed from Port Hedland to Japan with 24,900 tonnes of ore.
In 1967 iron ore was discovered at Mount Whaleback and a mining venture was undertaken that included the establishment of a new town, Newman, 426 km of rail from the mine to the port and the development of processing equipment at both Newman and Port Hedland. In 1986, at a cost of $87 million, the existing channel was dredged to allow the port to increase the tonnage of those ships able to enter the port. Prior to dredging the port was only able to load vessels less than 2,000 tonnes but today it is able to accommodate ships over 250,000 tonnes.
In 2013, finance was being raised for yet another iron ore mine, railway and port, this time for the Roy Hill project. It requires a 344 km railway.
With the neighboring ports of Port Walcott and Dampier, Port Hedland is one of three major iron ore exporting ports in the Pilbara region,
On 31 December 1968, a Vickers Viscount operated by MacRobertson Miller Airlines crashed at nearby Indee Station. The plane had flown from Perth without incident until about 10 minutes before landing at Port Hedland. The aircraft suffered catastrophic failure of the spar in the right wing. The wing suddenly separated from the fuselage. All 26 on board, including both pilots and two flight attendants, were killed.
In 1991, an immigration detention facility, the 'Port Hedland Immigration Reception and Processing Centre', was opened to deal with the arrival of boat people seeking asylum. Port Hedland was seen as a good location as it is in an area where many asylum seekers arriving by boat were entering Australia, and had an international airport that would allow for easy deportations when required. The detention centre, situated on the beach front, was formerly a single-men's quarters for Mount Newman Mining Co. (since renamed BHP Billiton Iron Ore). The centre was privatised by the First Howard Ministry in the late 1990s. It was closed in 2004 due to the falling number of asylum seekers arriving by boat in Australia's north-west. The town mayor called for the federal government to allow the town to use the detention centre to accommodate the many new mine workers needed in the town's mining boom. A lack of accommodation made it difficult for companies to operate efficiently as they were unable to house staff or consultants within the town's small number of hotels. The centre is now operating as the Beachfront Village.
Pollution from iron ore dust regularly exceeds national standards. The local hospitalisation rate for respiratory infections is 30% higher than the Western Australian average.
Port Hedland has a semi arid climate with a tropical savanna climate influence. Port Hedland is warm to hot all year round, with mean maximum temperatures of 36.4 °C (97.5 °F) in January and 27.1 °C (80.8 °F) in July. Maximum temperatures in summer are usually moderated by a warm but humid sea breeze. Port Hedland is very sunny, receiving around 218.9 of clear days annually. Dewpoint in the warmer months typically ranges from 19 °C (66 °F) to 22 °C (72 °F).
Annual rainfall (falling almost exclusively between December and June) averages 311.5 mm (12.26 in) but because of erratic cyclones is subject to some of the largest variations in annual precipitation in the world. As an illustration, in 1942 1,040 mm (41 in) fell, but in 1944 only 32 mm (1.3 in) fell and the town went for over 300 days with no rain. The town received record daily rainfall on 27 January 1967 when a total of 387.1 mm (15.24 in) of rainfall was recorded for 24 hours, which is more than the mean annual rainfall. The high summer temperatures experienced in Port Hedland mean that most tourists to the area choose to visit in the cooler months between May and September.
Port Hedland's harbour is managed by the Pilbara Ports Authority, a state government instrumentality. The Port Authority's headquarters, control tower and heliport are at Mangrove Point, just to the west of The Esplanade at the western end of Port Hedland. The tugboat pen, customs office and public jetty are at nearby Laurentius Point.
The harbour's wharves are located on both sides of the harbour – Finucane Island to the west and Port Hedland to the east. Access by oceangoing vessels into and out of the harbour is via a narrow curved channel.
Port Hedland's highest structure is the Leslie & Airey Rear Navigational Aids Tower, installed on 10 September 2012. The structure, which stands at some 60m above ground level, has been coined Port Hedland's 'Tower of Dreams' and was constructed by Goodline.
Port Hedland has a flatback sea turtle rookery, located on the main beach front. Several lookouts along the beach front path allow views of marine mammals including Indo-Pacific bottlenose dolphins, Indo-Pacific humpbacked dolphins and Australian snubfin dolphins.
The Port Hedland Saltworks Important Bird Area is a 103 km2 tract of originally intertidal land, now containing a saltern, about 20 km east of the port of Port Hedland. The site regularly supports over 1% of the world populations of red-necked stints and sharp-tailed sandpipers, as well as a population of the range-restricted dusky gerygone. Species that have strongly declined since the 1980s are broad-billed sandpipers, Asian dowitchers, curlew sandpipers, red-necked avocets, banded stilts, Oriental plovers, Oriental pratincoles and white-winged black terns. Other species present include Australian bustards, bush stone-curlews, western bowerbirds, painted finches and canary white-eyes.
Estuaries such as Pretty Pool support mangroves, marine fish, and birds.
The Blackrock Stakes is a 122 km race from Goldsworthy to Port Hedland in which competitors, either in teams or as individuals, push wheelbarrows weighed down with iron ore. It was first run in 1971, and competitors pushed a wheelbarrow full of iron ore from a remote mine site into Port Hedland. Since then the race has grown to raise than $1 million for charity as a modified version where teams of 10, trios, duos and lone runners now push modified wheelbarrows containing 11 kg of iron ore over the distance.
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