An artist's impression of the $6 billion Balla Balla iron ore project in the Pilbara.

Delays flagged for Pilbara project

Monday, 10 December, 2018 - 15:30

The $6 billion Balla Balla infrastructure project has experienced two setbacks, with the deadline for meeting its obligations under a State Agreement extended by 18 months and recent exploration work failing to live up to promise.

The update was released by ASX-listed Flinders Mines, which is majority owned by New Zealand-based Todd Corporation.

Todd is also the major shareholder in BBI Group, which is the developer of the Balla Balla project.

The development, which has an estaimated capital cost of $6 billion, involves development of a new port midway between Dampier and Port Hedland and construction of a rail link to new iron ore mines.

BBI signed a state agreement with the WA government in September 2017 to support development of the project.

“BBIG has received an extension for the performance of certain obligations, including to submit various proposals, under the state agreement from 31 March 2019 to 30 September 2020,” Flinders said in a statement to the ASX.

Flinders' planned Pilbara iron ore mine could be one of the first customers of the planned Balla Balla infrastructure.

BBI has been evaluating development of its own mines but has apparently had disapointing results.

“Following a drilling program over BBIG’s Hay Stack Flats tenements, BBIG has advised that these tenements are unlikely to have sufficient tonnage to justify a standalone development,” Flinders stated.

BBI also has an option to acquire Mineral Resources' Weelumurra deposit. 

BBI has previously disclosed conditional non-binding offtake contracts for the sale of up to 40 million tonnes per annum or iron ore, but said there was no guarantee any of the contracts would result in legally binding agreements.