Midwest nominates Yilgarn to Oakajee tender

09/05/2008 - 08:38

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On the final day of tender applications, Midwest Corporation Ltd has nominated Yilgarn Infrastructure as its preferred developer for the $1.5 billion Oakajee port.

Midwest nominates Yilgarn to Oakajee tender

On the final day of tender applications, Midwest Corporation Ltd has nominated Yilgarn Infrastructure as its preferred developer for the $1.5 billion Oakajee port.

Midwest has now cleared the way for Yilgarn to respond to the State Government's Request for Proposal for the port, where construction is planned to start late next year.

The port and rail development, which is to be constructed north of Geraldton, is a vital element in unlocking the iron ore potential of the area, with potential exports of over 45 million tones per annum being projected by 2010.

However tensions surrounding the Request for Proposal process grew over the last few weeks when Chinese steel producer Sinosteel launched a hostile takeover bid for Midwest, acquiring a 19.9 per cent stake in the company.

This led to Midwest announcing that it could no longer nominate Yilgarn, due to concerns about breaching Australian Securities Exchange rules.

The announcement from Midwest drew a potential $1 billion lawsuit against them for failure to nominate Yilgarn as the preferred infrastructure provider.

Midwest believed that due to the association between Sinosteel and Yilgarin, a shareholder approval was needed in order to nominate Yilgarn, but this was later squashed by the ASX.

The decision freed Midwest to nominate Yilgarn, and now leaves the infrastructure provider until today to make its submission to the State Government.

Yilgarn Executive Chairman Dr John Saunders said today the team was looking forward to making its bid submission as Midwest's infrastructure provider.

"From the outset, Yilgarn has been committed to developing open-access, multi-user Port and rail infrastructure to service all the mines in the Mid West, providing a genuinely regional solution to encourage not only the growth of the iron ore industry, but the region as a whole," Dr Saunders said.

Midwest Chairman Jesse Taylor said the company considers Yilgarn's technical expertise and financial backing as the best infrastructure solution for the Mid West region.

"We look forward to Yilgarn submitting a commercially and technically superior tender to the Western Australian Government on May 9."

Murchison Metals' jointly owned subsidiary with Mitsubishi, Oakajee Port and Rail, is the only other bidder for the Oakajee port facility.

As part of the nomination, Midwest and Yilgarn have agreed to release each other from all legal claims that have arisen up to the date of today's nomination.

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