Oakajee will be built: Ferguson

Federal Resources Minister Martin Ferguson is confident the $6 billion Oakajee port and rail project will go ahead despite the shelving of the project earlier this month.

Federal Resources Minister Martin Ferguson is confident the $6 billion dollar Oakajee port and rail project will go ahead despite the shelving of the project earlier this month.

Western Australia's long proposed Oakajee port was dumped in early November.

The port failed to gain Chinese investors and has been put on hold until more capital can be found.

Volatile commodity prices and uncertainty in the global metals market, as well as cost blowouts that saw the price of the port rise from $4.4 billion to as much as $6.7 billion, crippled the port and its main stakeholder Mitsubishi.

The announcement was another blow for the port, designed to service the burgeoning Mid West and Yilgarn iron ore region, which has struggled to get off the ground.

With several other big projects being dropped in recent months, some economists are predicting a further slowdown in the resource sector.

However, Ferguson said projects would go ahead eventually.

"They're good projects and at some point they'll come back," The West Australian reported.

Ferguson said high commodity prices had led to costs escalating and efforts were needed by business management, unions and governments to get on top of costs to enable such projects to go ahead.

Meanwhile plans are underway to save the project, with miners in the area set to join forces.

Padbury Mining chief executive Gary Stokes said now that the Oakajee project was ‘dead’, mining companies in the region would work on a Plan B that had been kept under wraps until now, The Australian reported.

Stokes named Sinosteel Midwest Corporation, Gindalbie Metals, Cashmere Iron, Ferrowest, Golden West Resources and Padbury all as companies involved in the plan to secure Chinese backing for the infrastructure project.

Mr Stokes said the alternative plan would involve lower tariffs and lower capital costs than the OPR plan.

Stokes said Padbury was well placed to go ahead with a different solution because it owned the intellectual property on a multi-user rail line and deepwater port at Oakajee.

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