another oakagee story..the more the merrier

July 27, 2009 01:58pm
GINDALBIE Metals has thrown its support behind WA's first steel mill at the $4 billion Oakajee Port project in the Mid-West.

Gindalbie today said its Chinese joint venture partner Ansteel last week signed an agreement with Premier Colin Barnett to conduct a feasibility study into a steel plant at the proposed port.

PerthNow Business first reported about the proposed steel mill at Oakajee in May.

The steel mill would be built at the port industrial site about 25 kilometres north of Geraldton.

Gindalbie CEO Garret Dixon said Ansteel’s commitment to a feasibility study was an exciting development for its Karara project, which Ansteel has invested $573 million into.

Ansteel also has offtake arrangements to receive ore from Karara, giving it a substantial interest in the Mid-West's development.

"This agreement with the WA Government highlights the benefits for Gindalbie of having a large strategic shareholder and partner with whom we can pursue further opportunities for iron ore processing and value-adding," Mr Dixon said.

“This project could provide another major market for Karara’s iron ore, in the process underpinning further expansions and production increases."

WA Environment Minister Donna Faragher last week upheld all key appeals lodged against the Environmental Protection Authority's recommendations and conditions for Karara.

The decision clears the way for the Terapod hematite deposit to be mined together with the Blue Hills North deposit, which together form part of the 2 million metric tonne hematite phase of the Karara project.

Oakajee Port & Rail's (OPR) about $160 million Bankable Feasibility Study on Oakajee is scheduled to be completed by March next year.

OPR is aiming to have financing secured by September 2010 for start of construction in early 2011 and final completion by early 2014.

Fellow Mid-West miner Murchison Metals - which holds a 50 per cent take in (OPR) - on Friday said OPR had "positive" talks with a number of Chinese groups, including China Communication Construction Company (CCCC), about funding and work at Oakajee.

Murchison said the meetings could see CCCC provide design assistance to OPR and China Railway Construction Corporation (CRCC) provide potential strategic co-operation for the rail component of the project.

The Federal and State Government's have both commited $350 million to Oakajee.

Gindalbie shares jumped more than 7 per cent, or 6 cents, on the news to last trade at 90 cents at 2:17 WST.