12/05/2009 01:17PM AEST PERTH (Dow Jones)--Oakajee Port and Rail Chief Executive Christopher Eves expects to learn later Tuesday whether the Australian government will partly fund the A$4 billion iron ore infrastructure project.
Eves said Australian Treasurer Wayne Swan will "indicate" in his budget if the Commonwealth will provide A$350 million in funding for Oakajee, matching a recent commitment from the Western Australian state government.
"OPR is quietly confident that the project will certainly receive indications today," he told reporters after a function in Perth.
Eves plans to start a feasibility study into the long-mooted rail and port venture later this month, which could lead to construction in early 2011 and completion in 2013, he said.
Slated to have an initial capacity of 35 million metric tons a year of iron ore, OPR is an equal joint venture between Australia's Murchison Metals Ltd. (MMX.AU) and Japan's Mitsubishi Corp. (MSBHY).
Eves expressed confidence in funding the venture, despite the contraction in debt markets, with Chinese banks expected to make a major contribution.
"The good thing about this project is we are actually approaching capital markets 12 to 18 months out from where we are today," he said.
Aside from bank debt and government funding, the project expects to attract loans based on equipment sales.
"If I am purchasing ship loaders or ore cars from China, we are looking for participation from Chinese banks to support that sale of equipment," he said.
Eves said that he is in talks with Gindalbie Metals Ltd., Murchison Metals-Mitsubishi and China's Sinosteel, aiming to sign up their mining ventures as customers for OPR.
"We think that the economics of those foundation customers coming together initially is absolutely compelling," he said.
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