04/02/2013 - 09:45

Aquila slumps on continuing budget dispute

04/02/2013 - 09:45

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Aquila slumps on continuing budget dispute
Aquila Resources boss Tony Poli.

Aquila Resources shares slumped today after the company disclosed that it would continue to restrict spending at its ambitious West Pilbara iron ore project to "minimum" levels for the rest of the financial year.

Aquila and its joint venture partner AMCI (IO) Pty Ltd have been unable to agree on the remaining 2012/2013 financial year budget.

It comes a few days after Aquila received the green light from the state government to develop Anketell Port as part of its $6 billion iron ore project.

The federal government will now consider whether to also approve the project, in which Aquila holds a 50 per cent stake.

The budget dispute was referred to arbitration in September 2012.

"Aquila advises that it has given notice to AMCI which Aquila considers brings to an end the arbitration about the budget for the 2012/2013 financial year," Aquila said in a statement.

"Aquila will continue to focus its efforts on how best to progress the project.

Aquila shares were 12 cents lower at $3.00 on Monday.

The coal producer has been moving into iron ore and developed proposals for two key mines in WA's Pilbara region.

Integral to the project is the proposed port development at Anketell.

The planned development of the port is crucial to Aquila securing the majority of the $3 billion in funding it needs for its iron ore project.

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