Oakajee agreement ends but OPR still in mix

The state government will continue to work with Oakajee Port and Rail (OPR) on planned infrastructure developments in the Mid West, despite OPR’s exclusive arrangement expiring on December 31, 2011.

Premier and State Development Minister Colin Barnett announced that, as expected, OPR would no longer have exclusive rights over the project.

The Premier said the change would create new opportunities for: attracting Chinese involvement in the project; reducing the capital cost of the project, including consideration of staging its development; and separating infrastructure development and mining interests.

OPR is jointly owned by Japan’s Mitsubishi Development and Perth company Murchison Metals, which have struck a $325 million deal for Mitsubishi to move to full ownership of both the infrastructure company and jointly owned mining company Crosslands Resources.

That deal followed cost increases for the infrastructure development and Murchison’s acknowledgment it would be unable to fund its 50 per cent share of the costs.

OPR and Murchison formally welcomed the changes, emphasizing that a State Development Agreement for the infrastructure project remains in place.

Mr Barnett stated that: “Oakajee will be built, Western Australia needs a deepwater port in the Mid West to unlock the region’s potential”.

“The State Government will continue to work with OPR as a proponent, but we will also be considering a broader range of options.

“Mitsubishi’s plan to purchase Murchison’s interest in the project, and to seek another partner is a very positive development.

“The Government will continue to encourage Chinese participation.

“This is vital to the project because Chinese companies have major interests in Mid-West iron projects and China is likely to be the biggest customer for the region’s iron ore.”

OPR chief executive John Langoulant said it remained the most appropriate vehicle to deliver the project in a timely manner.

“We share the government’s long-held vision of an integrated bulk iron ore supply chain, based on the principle of open access for multiple mines, underpinning creation a mid-west mineral province,” Mr Langoulant said.

“OPR has developed a comprehensive and detailed technical solution – in accordance with government scoping requirements - for a high-capacity, sustainable integrated iron ore supply chain.”

Meanwhile, Mitsubishi’s plan to move to full ownership of OPR and Crosslands has passed two hurdles.

Murchison announced on 23 December that it would pay $25 million in cash to Chameleon Mining to settle a legal dispute; this was a precondition of the sale, and the Foreign Investment Review Board has approved Mitsubishi’s move to 100 per cent ownership.