The Western Australian Government has approved a 570km corridor for a railway providing key Mid-West iron ore projects access to the proposed deepwater port at Oakajee.
The rail corridor will depart the proposed Oakajee port site and head east through the Moresby Range to a junction north-west of Mullewa enabling a link to the state freight rail network.
It will then heads north-east past the Tallering Peak project to Weld Range, and then north to Jack Hills. The corridor will accommodate a standard gauge heavy freight railway similar to those operating in the Pilbara.
The coridoor consists of nine sections varying in width to provide flexibility in dealing with geographical features, heritage sites, environmental issues, areas of mineral prospectivity and landowner requirements.
WA Premier Colin Barnett says the approval is a significant step in securing new infrastructure vital to the development of the Mid-West mineral province and to WA’s future development.
“This approval enables the Oakajee Port and Rail Project (OPR) to proceed with detailed planning and design for a railway to bring ore from deposits from the region’s north and east to Oakajee,” he says.
While approval for the corridor will enable more detailed development of the OPR proposal, Environment Minister Troy Buswell adds specific legislation will be required before a railway can be built.
“Planning the corridor has included consultation with potential users, local governments, affected landholders and other stakeholders such as farmers and pastoralists, Native Title claimants and mining leaseholders.”
Key OPR stakeholder Murchison Metals welcomed the approval but told shareholders it is yet to secure supply chain agreements with foundation customers or plug a $2 million funding shortfall for the project to make the government’s preferred go-ahead date of December 31, 2011.
After announcing a $16 million loss for 2011, Murchison, which holds a 50 percent interest in OPR with Mitsubishi says restructuring the ownership of OPR may be the best means of achieving a commercial outcome for the project.
"Consequently, Murchison is actively engaging with all stakeholders and parties with an interest in the development of the projects, including the WA Government, to achieve such an outcome to allow the project to proceed," the company says.
Murchison says it welcomes and supports the active involvement of WA Premier Colin Barnett in this process, including his initiatives to facilitate Chinese participation in the Oakajee project.
In September, Barnett travelled to China to discuss potential Chinese participation in the Oakajee project with the National Development and Reform Committee (“NDRC”), which plays a key role in overseeing China’s overseas investments.
"Murchison believes that OPR remains the most appropriate vehicle for the project’s development, regardless of whether OPR retains its exclusive rights to develop the port and northern rail infrastructure beyond the end of 2011," the company says.
However the company is clearly unconfident about retaining control of the project moving forward, offering any future investors unfettered access to pre-existing development work.
"We consider the progress made by OPR to date cannot be easily or quickly replicated," the company told its shareholders.
"Any commercial outcome that would enable the project to be developed so as to provide the foundation customers with a route to market in the shortest possible timeframe would naturally take advantage of this pre-existing body of work and approvals."
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