MMX 0.00% 4.7¢ murchison metals ltd

mitsubishi�s oakajee needs better plan

  1. 5,324 Posts.
    lightbulb Created with Sketch. 2139
    Mitsubishi�s Oakajee Needs Better Plan, Barnett Says

    By Jason Scott - Dec 1, 2010 5:33 PM GMT+0800

    Japan�s Mitsubishi Corp. and Australia�s Murchison Metals Ltd., building a A$4 billion ($3.83 billion) iron ore rail and port development, need a better plan for the project�s ownership to facilitate its funding, Western Australian Premier Colin Barnett said.

    �The participants in it need to get better organized in terms of their corporate structure,� Barnett said in an ABC Radio interview today. �Work out the ownership structure, and the funds will flow.�

    Oakajee Port & Rail Pty, jointly owned by Mitsubishi and Murchison, on Nov. 4 delayed the start of the project by as many as six months. The project may be redesigned to exclude Mitsubishi and Murchison, which are also partners in the area�s Jack Hills magnetite iron ore project, and to bring in Chinese infrastructure builders, analyst Peter Strachan said.

    �That would be a really good, logical outcome,� Strachan, who heads Perth-based independent advisory firm StockAnalysis, said today by phone. �There�s a mismatch of skills and funding. Barnett�s trying to bang their heads together and get a more sensible structure.�

    Murchison Chairman Paul Kopejtka was traveling overseas and was unavailable for comment, according to his office today.

    �We�re not in a position to comment on this coverage,� Mitsubishi said in an email response to queries from Bloomberg News. �Through our joint ventures we continue to make every possible effort to drive forward the feasibility studies of these projects.�

    Boardroom Talks

    The terminal project near Geraldton, 430 kilometers (267 miles) north of the Western Australia capital, Perth, will allow users to export 45 million metric tons of iron ore a year from the Midwest region.

    �There�s a lot of effort going on in boardrooms here and overseas to better align the partners in this project so those that are good at mining can concentrate on that and those that are infrastructure developers and funders can concentrate on that,� Barnett said. �I�m allowing a bit of time here for the players to sort that out.�

    Mitsubishi, Japan�s largest trading company by market value, and Perth-based Murchison needed to raise about A$3 billion to fund construction, Oakajee Port & Rail said in March 2009. Government funding, split between the state and federal branches, was initially to total A$678 million.

    A Western Australian parliamentary report into the development suggested the state government could be forced to provide additional funding, the Australian Financial Review reported yesterday.

    �Can Mitsubishi fund the project? Of course they can,� Barnett said. �Murchison, a small Australian mining company producing small tonnages of iron ore; can they match a A$4 billion investment? I don�t know. That�s the question in the market place.�

    Chinese companies are in a better position to fund the project than Murchison, he said, without naming any potential investors. �So what I�m trying to do is align the various partners with their capacity to actually fund their fair share of the project.�

    Mitsubishi and Murchison are also partners in Crosslands Resources Ltd., which is developing the Jack Hills project in Western Australia�s Midwest region and intends to use Oakajee�s transport infrastructure.

 
watchlist Created with Sketch. Add MMX (ASX) to my watchlist

Currently unlisted public company.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.