Oakajee still on the cards: Barnett

Sinosteel Midwest, the local subsidiary for Chinese giant Sinosteel, said it would park the project “until certainty around the Oakajee Port & Rail development can be resolved”.The company had made no secret of its disappointment over delays for first start up at OPR, which has now been pushed out to the end of 2015.However, The West Australian quoted Barnett as saying while he couldn’t give assurances about timelines, the project remained one of the state’s major developments going forward. He also knocked back speculation that the decision represented a move by the Chinese to gain ownership in the project. “I don’t believe it’s that, but China in a broad sense, through its state-owned enterprises, is keen to be a direct participant in the Oakajee development,” the newspaper quoted him as saying. “I don’t underestimate the intensity of the commercial negotiations taking place. “This is a big roll of the dice for a number of companies. The state government has a stake in this, so does the Commonwealth, because it is so important to this state and this nation. As I have said for years, this project will never be easy.” Fears the magnetite iron ore sector may be under threat following the uncertainty over Oakajee have been quashed by Magnetite Network executive director Megan Anwyl. “It’s obviously a challenge for OPR to have one of their three foundation customers pull out, but I don’t think that we should be calling the end of the magnetite industry,” she said. “I think what is interesting is what the state government is going to do in the OPR context, given the deadline is coming. “It is an unwelcome complication for financing for OPR and Oakajee port but there have been a lot of uncertainties around the timeline there anyway.” Gindalbie Metals, one of the other two foundation customers and a member of the Magnetite Network, threw its support behind the Oakajee development and said it would continue to be engaged in talks with all parties involved. Gindalbie requires the development of Oakajee port for production beyond its anticipated Stage 2 expansion to 16Mtpa.Meantime, Padbury Mining believes Sinosteel’s decision to suspend development of Weld Range was understandable given the uncertainty over the Oakajee development. Padbury managing director Gary Stokes said the company shared Sinosteel’s concerns about the Oakajee development, which was why its shareholders approved the purchase of intellectual property developed by Yilgarn Infrastructure.“This purchase was intended to provide Padbury with a “plan B” to contribute to a possible infrastructure solution for the Mid West, should the current provider OPR not be able to deliver the project in its current form,” he said. Sinosteel’s shelving of Weld Range comes only days before Murchison was due to release feasibility studies for the OPR and Jack Hills expansion projects. Murchison and Mitsubishi have also received pressure over rising costs from the Oakajee project with speculation the cost figure could be above $7 billion.Murchison entered a trading halt yesterday afternoon to give it time to consider Sinosteel Midwest’s announcement.Murchison is expected to make an announcement before start of trading on Monday.

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