Barnett gets guarantee for Oakajee infrastructure project

Western Australian Premier Colin Barnett yesterday sought assurances from Oakajee Port and Rail that the eponymous infrastructure project was indeed going ahead.

Western Australian Premier Colin Barnett yesterday sought assurances from Oakajee Port and Rail (OPR) that the eponymous infrastructure project was indeed going ahead.

In the wake of recent speculation that the project was in trouble, OPR chief executive John Langoulant told the Premier the project was merely running late. 

OPR is building the $4.3 billion project on behalf of Japanese giant Mitsubishi Group and Australian miner Murchison Metals.

The Australian reported last week that Mitsubishi was considering pulling out of both the project and the Jack Hills magnetite iron ore mine over concerns about their ongoing feasibility.

Murchison has continually denied the rumours.

However, Barnett, who has devoted $339 million in public funding for the project and is hoping for the same from the Federal Government, contacted Langoulant for clarity on the issue.

“Given the media speculation, and speculation around the market, we did inquire with Mitsubishi if there was any truth to this,” he told The West Australian.

“Their reply came back that no, there was not, they are committed to the project and there is no substance at all.

“We expect to see the port and the rail developed.”

Langoulant said the project was running up to six months behind schedule and was likely to be completed in the second-half of 2014 rather than the first-half.

The project has a complex ownership structure, with Mitsubishi and Murchison each holding 25% of OPR and the Crosslands Resources holding the remaining 50%.

However, Crosslands is actually a 50-50 joint venture between Mitsubishi and Murchison to develop the Jack Hills project.

Compounding matters, the infrastructure project also counts Sinosteel Midwest and Gindalbie Metals amongst its customers.

The Australian claimed, aside from the Jack Hills project, the Japanese company was also scrutinising the economics of the whole mid-west region. 

The region’s lower grade iron ore deposits are widely distributed and have multiple owners and customers, making it difficult to predict the future usage of the infrastructure.

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