Boomerang backs rail

27/11/2007 - 22:00

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Many market watchers were in awe of Andrew Forrest’s plan to raise a few billion dollars for construction of a 240-kilometre railway from his planned iron ore mine in the Pilbara to Port Hedland.

Boomerang backs rail

Many market watchers were in awe of Andrew Forrest’s plan to raise a few billion dollars for construction of a 240-kilometre railway from his planned iron ore mine in the Pilbara to Port Hedland.

Well, that was then and this is now. And now there’s a new wow factor, with the launch in Perth this week of something called Project Iron Boomerang – a $55 billion project to construct a 3,000km railway from Abbot Point in Queensland to Port Hedland, with industrial smelter park precincts at each end.

The plan would be to produce pig iron and then ship it overseas, rather than iron ore and coal both being shipped overseas to produce steel.

The company behind the project is East West Line Parks Pty Ltd, which is backed by ANZ chief economist Saul Eslake, some determined engineers in WA and Qld, and companies including Xstrata Coal and Leighton Contractors.

Project Iron Boomerang has been two years in the making and, after a few million dollars and a lot of time and energy, the team has just about completed the pre-feasibility stage.

It is in discussions with steel houses and other producers to fund the feasibility stage, expected to cost almost $1 billion.

The project would then move to a construction and commissioning phase, which is estimated to cost $US12 billion.

Queensland-based East West managing director Shane Condon said he expected the railway and smelter parks would be operational by 2013 and the company aimed to list on the stock market in 2016.

Mr Condon said steelmakers investing in the project would pay to develop and own blast furnaces in the smelter parks, while East West would own and operate the rail link and the smelter park precincts.

Mr Condon has held discussions with WA resource industrial players this week to galvanise support for the project.

The producers would need to send ore to East West’s infrastructure rather than to port facilities.

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