plan b

Junior jumps in with plan to get Oakajee moving

by: Sarah-Jane Tasker
From: The Australian
July 12, 2012 12:00AM

A THIRD proposal is firming as a frontrunner to break the deadlock on the development of the troubled Oakajee port and rail infrastructure in Western Australia's Mid-West region, with a junior explorer finalising its plan to build the project.
Padbury Mining has increased talks in China on its port and rail solution, which it says will emerge as the plan to build the development once it becomes apparent Mitsubishi-backed Oakajee Port & Rail cannot continue with its proposal.

Padbury managing director Gary Stokes told The Australian his company held the key to an alternative solution because it already owned the intellectual property on a multi-user rail line and port at Oakajee. The company purchased the IP last year for $2.25 million from OPR's former rival, Chinese-backed Yilgarn Infrastructure.

The IP, designed by the Chinese when the development was put out to tender, now includes updated financial and port and rail designs.

"We hold the key (with the IP) but we don't want to be an infrastructure player," Mr Stokes said.

"OPR have had three years and have not progressed further and it is time for something to happen."

Yilgarn lost its bid for the exclusive rights to build Oakajee in 2008, when the state government selected the Japanese-backed consortium to build the infrastructure. But OPR has been plagued with setbacks.

Gindalbie Metals chairman George Jones has been working on a plan B focused on a southern solution that sees a railway built to the three Chinese-backed iron ore mines in the south of the Mid-West region.

Mr Stokes said the southern solution could not be supported by the Chinese or the government, but a regional solution that took in iron ore from mines in the north and south of the region would receive wider backing.

"We have held lots of discussions in China and with other Australian infrastructure contractors and there is a lot of interest in what we are proposing," he said. "It is clear that the Chinese are only interested now in a plan B and we have a port and rail design ready to go that was previously developed by the Chinese."

The Chinese-backed mines in the Mid-West include Karara, owned by Gindalbie and China's Ansteel, along with Sinosteel's Weld Range project and Asia Iron's Extension Hill.

Padbury's "information memorandum" on its proposal outlines the case for an alternate infrastructure company called Midwest Rail and Port.

The junior explorer would act as the catalyst to engage other mines in the Mid-West to co-operate and sponsor the establishment of the new infrastructure company.

"Padbury is proposing to sell its IP to the sponsors of Midwest Rail and Port to fast-track the establishment of the company as a credible infrastructure provider . . . and signal to the WA government that a total solution can be delivered as an alternative to the failed OPR/Mitsubishi bid," the company said in its memorandum.

Mr Jones said last week he expected a decision on whether OPR would continue with the development by September, a timeframe supported by Mr Stokes.

http://www.theaustralian.com.au/business/mining-energy/junior-jumps-in-with-plan-to-get-oakajee-moving/story-e6frg9df-1226423848594