Gindalbie Metals may take a small equity stake in the beleaguered multi-billion-dollar Oakajee port development in Western Australia. The future of the Murchison Metals-driven development in WA's Mid West region came under a cloud in June when state-owned Chinese group and would-be customer Sinosteel mothballed its $2 billion Weld Range iron ore project.
Gindalbie managing director Tim Netscher said he was convinced the Oakajee project, a joint venture with Japan's Mitsubishi, was going ahead but "needs a fundamental re-look".
Gindalbie will use the existing Geraldton port to export iron ore from the first two stages of its flagship Karara project in WA but will need Oakajee in about five years when production increases to 16 million tonnes per annum.
"We would become involved in something like that (new ownership structure) to make it happen rather than to view it as an investment we had to be in," Mr Netscher told reporters at the Diggers and Dealers mining conference in Kalgoorlie, Western Australia on Monday.
"We would take a nominal equity stake, for example, in a revised structure if we thought that would help make it happen.
"The stake would be a single-digit figure," he said.
"I'm convinced Oakajee is going to happen. It's going to happen in its time.
"If that means stage three is delayed for us, it doesn't matter: we'd be making lots of money (from stages one and two)."
Mr Netscher said Murchison's current profit model for Oakajee was not sustainable and the financing was "not right".
WA Premier Colin Barnett recently said Oakajee's ownership structure needed to change.
Gindalbie was up 1.5 cents at 80.5 cents on Monday.
MMX Price at posting:
80.0¢ Sentiment: Hold Disclosure: Held
