24/09/2007 - 11:38

Yilgarn gains extra backing for Mid West plan

24/09/2007 - 11:38

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Gindalbie Metals chairman George Jones has backed Yilgarn Infrastructure as the preferred developer of rail and port infrastructure in the Mid West, and warned the state government that major decisions need to be taken by the end of the year.

Yilgarn gains extra backing for Mid West plan

Gindalbie Metals chairman George Jones has backed Yilgarn Infrastructure as the preferred developer of rail and port infrastructure in the Mid West, and warned the state government that major decisions need to be taken by the end of the year.

"If decisions aren't made in the next three months, we will start doing some serious damage, reputational damage and execution risks," Mr Jones told a media briefing today.

Yilgarn has backing from a range of Chinese entities to proceed with the $3 billion infrastructure project, while iron ore miner Murchison Metals has formed a rival proposal with Japan's Mitsubishi Corporation.

Mr Jones said Gindalbie was watching the debate with great interest, including the possibilty that the state government may scrap a state agreement held by Yilgarn ally Midwest Corporation Ltd.

"It won't be a good look if our own state breaches state agreements."

Mr Jones said he was very keen to see the Oakajee port proceed

"I actually do understand the position the government is in, I do believe they are trying to resolve that, and we are trying to be part of that solution.

"I have a high confidence level that rationale will prevail and a solution will be found in the fairly near future."

When asked about his preferred solution, he said: "With Ansteel being a shareholder of Gindalbie and a major customer, they are a part of the Yilgarn infrastructure....so you'd have to guess that we support the Yilgarn proposal.

Meanwhile, Midwest Corporation has formally committed to become a foundation user of infrastructure planned by Yilgarn Infrastructure Ltd for the Mid West iron industry, frustrating the position of Murchison Metals Ltd.

Murchison last week signed a $150 million deal with Japanese industrial giant Mitsubishi, with the aim of establishing a new infrastructure company, Oakajee Port & Rail Ltd, in the region.

OPR will seek the right to develop new rail and port infrastructure to transport expanded production from Murchison's flagship Jack Hills project in the Mid West.

 

The full text of a Midwest announcement is pasted below

Midwest Corporation Limited announced today that it has formally committed to become a foundation user of the railway and port infrastructure planned by Yilgarn Infrastructure Limited for the mining industry in the Mid West region of Western Australia.

Midwest Corporation and Yilgarn Infrastructure Limited have formalised exclusive arrangements to deliver infrastructure in accord with the Iron Ore (Murchison) Agreement Authorisation Act (Midwest's State Agreement Act)

Midwest Chief Executive Officer Bryan Oliver said that signing the formal agreement with Yilgarn provided a lead for other existing and intending iron ore producers in the region.

"As a foundation user Midwest Corporation is undertaking to commit to Yilgarn's independently funded, built and operated infrastructure", he said.

"An important provision of the agreement is that other producers who sign up as foundation users will do so on similar commercial terms to Midwest's."

Mr Oliver said Midwest Corporation would continue working with Yilgarn in accord with Midwest's State Agreement Act to progress development of the infrastructure as quickly as possible.

"We look forward to constructively working with the State Government, the Mid West community and other users to construct critical port and rail infrastructure in accord with Midwest's State Agreement Act", Mr Oliver said.

 

 

The full text of a Yilgarn announcement is pasted below

YILGARN WELCOMES MIDWEST CORPORATION AS FOUNDATION CUSTOMER

Yilgarn Infrastructure Limited has welcomed the formalisation of arrangements with Midwest Corporation establishing the miner as a foundation customer of the company's proposed Oakajee Port and Rail Project.

Midwest Corporation (ASX:MIS) announced the commitment today.

Yilgarn Chairman Dr John Saunders said the agreement provided an undertaking that Midwest would exclusively commit to Yilgarn's infrastructure project, which would be funded, built and operated independently of the mine customers on an open-book, open-access, multi-user basis.

"Yilgarn's commitment to its foundation customers is to provide an international standard, low cost infrastructure delivered on time to meet the mines' requirements for exports of iron ore to China in 2011," he said.

"The development of multi-user port and rail infrastructure designed to service all the region's mines is vital to enable the expansion of the Mid West iron ore industry.

"The formalising of arrangements with Midwest Corporation is a crucial move forward in ensuring this project achieves financial close."

Dr Saunders said an important component of the arrangement was a provision that would ensure other mines signing as foundation customers of the infrastructure would do so on commercially similar terms.

"Yilgarn looks forward to working further with the State Government and its relevant agencies, the region's other mines and the Mid West community to ensure this vital infrastructure is developed."

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