Now we have all the pieces of the puzzle and we should know within the next few weeks .weather PDY/Chinese backers will be part of the Oakajee project or not.
Oakajee port delaysABC January 27, 2011, 11:32 am Send
The Premier, Colin Barnett, has expressed frustration at delays with the Oakajee Port project.
Mr Barnett has sent the project's proponents, Oakajee Port and Rail, a list of conditions the Government wants fulfilled before extending the company's deadline.
He says he is frustrated by delays and wants to ensure they are kept to a minimum.
"I have written to Oakajee Port and Rail, I did so in the New Year, outlining some conditions that we would require before extending that mandate," he said.
"They are exacting conditions because I am frustrated that the project is not going as quickly as I would want.
"And my frustration is in part because mines are being built right now in the Mid West and those mines require a railway to transport the ore and a port to export it from.
"So the time is getting short."
Mr Barnett says he hopes an agreement can be met within the next few weeks.
China considers back-up funding for Oakajee,
The West Australian November 3, 2010, 6:08 am Send
China's steel industry has begun informal talk on a back-up financing model for the $4.4 billion Oakajee port and rail network amid mounting concerns the much-needed infrastructure will struggle to secure the necessary funding.
Although China Inc is conscious that Oakajee Port & Rail, a consortium owned by Murchison Metals and Mitsubishi Development, has an exclusive mandate from the WA Government to deliver the crucial infrastructure, it is understood talks among the various Chinese interests in the Mid West iron ore industry have begun.
OPR's government-granted exclusivity period is understood to expire in April, by when it has to demonstrate it has an economically viable project and can meet the 2014 development schedule.
Interest from potential Mid West iron ore mine customers wanting to use the port and rail is strong.
However, OPR's ownership structure means the Jack Hills mine, also owned by Murchison and Mitsubishi, is guaranteed an allocation of up to 25 million tonnes a year of the port's 45mtpa capacity.
There are mounting concerns Jack Hills' big but low-grade deposit means a mine development could cost several billion dollars, and even then leave Murchison and Mitsubishi starring at high operating costs that could, at the very least, delay development and potentially even scupper the project.
Jack Hills is one of three OPR foundation customers but is yet to finalise a bankable feasibility study. The other two foundation customers are Gindalbie Metals, whose Karara mine in under construction, and Sinosteel Midwest which has completed a bankable feasibility study for its Weld Range development. The three foundation partners, OPR and the WA Government have begun due diligence of the respective projects as part of efforts to finalise supply chain arrangements with the infrastructure provider.
It is understood parties involved in the due diligence process are alarmed at the lack of information on Jack Hills, sparking their fears Oakajee's development will be delayed if not terminated under the existing structure.
The sensitive nature of the due diligence process means none of the parties involved would comment on the record. But, as one player said, "we remain committed to making the existing situation work but I am looking at options".
Another source confirmed that concerns about Oakajee's development were being discussed in China. He said talks had started to devise a back-up financing model, funded out of China, to be in place and presented to the Government if OPR failed to push ahead with the infrastructure project by the end of the exclusivity period.
"Any prudent business has to have in place alternatives," the source said. "My understanding is that it's being kicked around in China but it's very sensitive. They understand that (there is) an exclusivity period. While OPR has exclusivity at the moment to develop the port and rail, the business needs to look at alternatives."
China Inc has already tried to secure the Oakajee port and rail development rights, through Yilgarn Infrastructure, but the then-Labor Government in 2008 choose OPR.
It is likely that China Inc would only agree to become involved in funding Oakajee in return for effective equity in some of the infrastructure such as berths.
Gindalbie's Karara project, which will use Geraldton's port for its start-up operation, needs the Oakajee port for its Stage 2 expansion, on which studies are already under way. Extension Hill is in a similar position.
Sinosteel's Weld Range project will only happen if Oakajee is built and Golden West Resources views Oakajee as its best option.
"We totally support OPR and hope they are able to get their act together and build the port and rail," Golden West's John Lester said. "Should it happen OPR are for whatever reason unable to do it, we hope someone else steps in."
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