OPR confident over Oakajee financing

OPR is a subsidiary of WA mid-west focused miner Murchison Metals, which entered a trading halt last week ahead of the signing of an agreement between OPR and the WA government.WA Premier Colin Barnett has signed a development agreement with OPR, which is also a 50/50 joint venture between Murchison and Japan’s Mitsubishi Corporation.OPR was last year named the preferred developer of major new deepwater port and open access rail facilities to be built in Western Australia’s Midwest region.“The development of a deep sea port, associated rail infrastructure and a purpose-built, world-class industrial estate at Oakajee is the single most important project for Western Australia’s economic development over the next 50 years,” Barnett said.OPR chief executive officer Chris Eves said despite debt markets being tight, the company has a lot of support from banks and is in a good position going forward.“At the moment, we have signed indicative term sheets from nine banks, including all major Australian trading banks and that is underwritten by the Japan Exim Bank for 75 per cent of total debt,” he said.Eves said the amount OPR will need to raise depends on the outcome of the bankable feasibility study, but he estimates the debt to equity ratio to be 60:40 at this point.The company is also confident that the capital cost will be lowered. It noted financing will not be needed for at least 12 months and said markets should have started to recover by then.“There is an expectation it will come down – contractor rates have certainly come down, steel prices have certainly come down,” Murchison Metals executive chairman Paul Kopejtka said.“You put the two major components together and you do get lessened pressure on pricing.”While a decision on the Infrastructure Australia funding application is not expected until the end of the month, Eves said there are signs of a positive outcome.“If the project’s feasibility is established and funding secured, construction could begin in 2010-11 with export shipments starting in 2013-14,” said Barnett.The project is expected to create up to 2000 jobs during the construction phase with around 400 workers required to operate the facilities on completion.

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