That link won’t open
@bargiee, is this the article....
NZ's Todd Corporation paves way for $5.6 billion Pilbara iron ore projectJulie-anne Sprague and
Tess IngramUpdated Jan 23, 2017 — 6.37pm,first published
at 4.58pmSave
Share
The Balla Balla Infrastructure Group (BBIG), majority owned by NZ's Todd Corporation, wants to construct a new iron ore export port between Karratha and Port Hedland and construct a 162-kilometre railway linking stranded iron ore deposits in the central Pilbara.
The state agreement signed between BBI's BBI Rail Aus Pty Ltd and the state government on Monday relates to the port and rail development, which is estimated to cost $3 billion. The remainder of the estimated $5.6 billion figure trumpeted by the Barnett government is from the development of a mine owned by Flinders Mines, which Todd Corporation
unsuccessfully tried to acquire last year.
Premier Colin Barnett and state development minister Bill Marmion look on as Todd Corporation group CEO Jon Young signs a state agreement. Julie-Anne Sprague
The government said it would create 3300 construction jobs and 900 ongoing production jobs, which includes jobs from yet-to-be-developed mines.
Critics were quick to highlight that Todd Corporation had not yet secured finance and did not have an agreement with Flinders Mines or other producers for their ore, which was needed to make the rail and ore project economically viable.
Flinders Mines[/paste:font]
Advertisement
The project was also likely to require the iron ore price to remain above analyst forecasts over the next few years.
Strachan Corporate analyst Peter Strachan said the projects had additional hurdles to clear before becoming a reality.
"These projects are subject to finance, offtake agreements and all sorts of factors," Mr Strachan said. "It is all very well for the government to clear the way in terms of approvals but it is still up to the companies to actually come to the commercial decision they need."
The Labor opposition accused Mr Barnett of making a premature deal to allow him to talk up jobs as he seeks a third term at the
March 11 election.
WA Premier Colin Barnett and state development minister Bill Marmion look on as BBIG representative Nick Curtis signs a state agreement. Julie-Anne Sprague
Labor shadow treasurer Ben Wyatt said it reminded him of when Mr Barnett promoted the Oakajee project, a $6 billion rail and port project that was ultimately shelved.
"Mr Barnett is coming out now trumpeting a project that has no finance, has no financial investment decision and a company that doesn't yet own the tenements," Mr Wyatt said. "I think it is perhaps a bit premature."
But Todd Corporation group chief executive Jon Young said "it was inevitable" that the project would happen.
Advertisement
"This is the most competitive world-scale greenfields iron ore project on the face of the planet," Mr Young said.
"At the end of the day this is a low-margin competitive business and scale and low cost structure are what's going to drive project economics."
He said Todd would make a final investment decision in 2018 and within months of this work could begin.
Todd may
have been unsuccessful in buying Flinders but it gained a 53.4 per cent stake. Flinders' deposits are near Fortescue Metals Group and Rio Tinto operations but it has been unable to access their railways.
Flinders shares were put in a trading halt on Monday pending an announcement after they jumped 12.8 per cent to 4.4¢ per share on Friday.
Mr Young said he was hopeful of striking a deal with Flinders. He said the state agreement gave the project credibility and it would accelerate discussions with debt and equity partners to finance the project.
Its project is based on long-term iron ore prices for $US65 per tonne but Mr Young said it could withstand prices dropping back to the mid $US30 per tonne range.
"We believe it is economic right through the cycle," he said.
New Zealand's
National Business Review ranked the Todd family third in its 2016 Rich List, with an estimated worth of $NZ3.3 billion.
The project would mark Todd Corporation's biggest investment in Australia. It also has investments in tungsten miners Wolf Minerals and Northcliff Resources as well as energy, healthcare, property, and technology.
L4L
