looks like the chinese one another crack

Miningnews.net

China looks to Oakajee back-up plan Wednesday, 3 November 2010

CHINA?S steel industry has reportedly begun informal talks on a back-up financing model for the $A4.4 billion Oakajee port and rail network development in the state?s Mid West.

It follows concerns the much-needed infrastructure will struggle to secure the necessary funding.

While China is conscious that Oakajee Port & Rail, a consortium owned by Murchison Metals and Mitsubishi Development, has an exclusive mandate from the Western Australian government to deliver the crucial infrastructure, an article in the West Australian said talks among the various Chinese interests in the region?s iron ore industry had 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.

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.

Jack Hills is one of three OPR foundation customers but is yet to finalise a bankable feasibility study.

The others include Gindalbie Metals with its Karara magnetite mine which is under construction, and Sinosteel Midwest, which has completed a bankable feasibility study on the Weld Range development.

The three foundation partners, OPR and the WA government, have begun due diligence on 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 about the lack of information on Jack Hills, sparking their fears Oakajee?s development will be delayed if not terminated under the existing structure.

One source told the West Australian that concerns about Oakajee?s development were being discussed in China, and that 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.

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