Oakajee to cost $4.4B

Oakajee Port and Rail said on Tuesday it had delivered a draft bankable feasibility study to the Western Australian government which demonstrated the “strong technical feasibility” of the combined port and rail project.Construction costs will total $4.37 billion in 2010 dollars, with the private-sector contribution likely to come to around $3.75 billion – though those figures don’t include land acquisition, engineering and design costs, which are still “subject to review”.OPR will ask the state and federal governments to kick in $565 million (plus $60 million as a contingency) for the common-user portion of the project.The delivery of the BFS comes only a week after OPR chief John Langoulant flagged a potential doubling of capacity at the port, and indicated that uranium miners might be able to ship their product through the planned port in the future.OPR said draft implementation agreements had also been delivered to the state government, though some work remained to be done on outstanding matters. Final implementation agreements are expected to be finalised by the end of the year.The planned initial capacity of the port will be 45 million tonnes per annum, including two Cape class berths, and the feasibility study includes the potential for a significant further expansion of the port as demand increases.“The positive findings of the study, coupled with strong interest from regional miners in utilising the new port and rail supply chain, strengthen the business case and our confidence in the technical feasibility of this complex infrastructure task,” Langoulant said.WA Premier Colin Barnett welcomed the submission of the feasibility study.“The next step is for the government to conduct due diligence on the draft bankable feasibility study to ensure that the project will meet the state’s objectives and deliver value for money,” he said.“Bringing this massive and complex project together is a huge undertaking for the proponent, for the state government, and for Mid West mining companies, but significant progress has already been made.”Barnett said OPR was negotiating with three potential foundation customers for use of the facilities – Sinosteel Midwest (Weld Range project), Karara Mining (Karara project) and Crosslands Resources (Jack Hills project). Gindalbie, the owner of the $1.8 billion Karara iron ore project, today announced a $US65 billion offtake agreement that covers the mine’s 30-year life.“This is a huge achievement and one that gives further certainty to the Oakajee project,” Barnett said.OPR is due to deliver a final bankable feasibility study towards the end of the year.

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