12/05/2009 - 14:40

Oakajee security rests on three mines

12/05/2009 - 14:40

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If you want to see a balancing act, get involved in infrastructure in the Mid West. That is where billions of dollars of investment - the most important we are told for the next 50 years - relies on numerous stakeholders coming together.

Oakajee security rests on three mines

If you want to see a balancing act, get involved in infrastructure in the Mid West. That is where billions of dollars of investment - the most important we are told for the next 50 years - relies on numerous stakeholders coming together.

For instance, at least three significant iron ore mines will be required to underpin the $4 billion Oakajee deepwater port, according to Geraldton Iron Ore Alliance chief executive Rob Jefferies, one of the panellists at a presentation on the development of the transport hub at a Committee for Economic Development of Australia seminar held this morning.

And that is where the juggling comes in if everything is work to a timetable that has the port exporting by 2013-14.

Oakajee Port and Rail chief executive Christopher Neves made the key presentation for the morning outlining the port's progress - and highlighting the need for mining hopefuls to start making commitments to the port in terms of throughput, if they wanted to get in on the ground floor.

OPR is also starting the process of seeking expressions of interest for a whole range of construction requirements.

Despite OPR's financial connection to Murchison Metals it can't build a project independent of several other players, including mining rivals and the state government which is not only backing the project with cash and land but also has control of the approvals pipeline.

And here is where the juggling really takes place.

We've already seen this issue last month with the Environmental Protection Authority's limited support of mining plans by Gindalbie Metals, which the company has today appealed.

Gindalbie is the most progressed of the mining hopefuls and has indicated its intention to use the deepwater port for the expansion of its yet to be developed $1.8 billion Karara iron ore joint venture with AnSteel, helping to justify the Oakajee port which premier Colin Barnett has described as the most important piece of infrastructure in WA for the next 50 years

Mr Jefferies neatly sums up just how tricky it is to marry the big vision with the reality on the ground.

"The Mid West iron ore industry is unique in that it consists of a number of geographically spread projects of small to medium scale, working in cooperation with each other," he said.

"The key issue for Oakajee's development is that no one mine alone can sustain the investment in this infrastructure, and probably no two projects can do so either.

"The financial feasibility is likely to require at least three significant iron ore mines and long term success will depend on achieving ongoing throughput from planned mines over the next few decades."

A number of companies with iron ore mines in the Mid West region have indicated their intention to use the Oakajee port and associated rail, with Murchison Metals to use the infrastructure for the expansion of its Jack Hills operation.

Murchison is a 50 per cent co-owner of Oakajee Port and Rail (OPR), the government selected proponent to develop and construct the deepwater port and rail. Japan's Mitsubishi Corporation owns the balance.

Other mines in the region include Sinosteel subsidiary Midwest Corporation's Koolanooka and Blue Hills projects, Mount Gibson Iron's Tallering Peak operation and Golden West Resources' Wiluna West project.

Meantime, OPR chief executive Christopher Eves said construction of the port was on track for construction to start in 2011, with completion anticipated in 2013.

OPR is investing more than $100 million over 12 months for the project's bankable feasibility study,

The port will have an initial start up capacity of 35 million tonnes per annum.

Premier Colin Barnett has previously said the government will commit up to $678 million towards the project if it misses out on funds from the Rudd government.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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