Murchison, Mitsubishi consider funding plans for ore port
Murchison Metals Ltd. (MMX) and Japanese partner Mitsubishi Corp. (8058) are revising plans for their A$5.94 billion ($6.11 billion) Oakajee iron ore infrastructure project in Western Australia after failing to secure key agreements, Bloomberg reports. Options include revising tariff models and a broader-based restructure of Mitsubishi and Murchison’s Oakajee Port & Rail Pty venture, the Perth-based company said in a statement to the Australian stock exchange today.
Mitsubishi and Murchison, planning to spend A$3.7 billion expanding the Jack Hills iron ore mine in the area, want to develop the Oakajee port and rail project to open up the Mid- West region for iron ore exports to Asia. State Premier Colin Barnett visited China last week in a bid to lure financial backing for the project.
Expenditure and short-term work programs for Oakajee and Crosslands Resources Ltd., responsible for the Jack Hills project, “are being scaled back whilst a commercial solution is being sought,” today’s statement said.
Murchison’s strategic review of the projects, announced July 4, to help the company meet funding obligations or “otherwise unlock value for its shareholders” is ongoing, it said. Iron ore is used to make steel.
Oakajee Port & Rail in August 2010 signed initial agreements with potential customers of the project including Karara Mining Ltd., a venture between Gindalbie Metals Ltd. (GBG) and China’s Anshan Iron & Steel Group and Sinosteel Midwest Corp., a unit of Sinosteel Corp. The operation had a planned export capacity of 45 million tons.
Sinosteel Midwest on June 23 said it was suspending work on its proposed A$2 billion Weld Range mine because of uncertainty about the Oakajee development.
Murchison, which today announced a full-year loss of A$16.6 million, fell 3.7 percent today to 52.5 Australian cents at 3:14 p.m. in Sydney trading. It’s lost 59 percent this year. Mitsubishi rose 0.6 percent to 1,756 yen in Tokyo.
Mitsubishi and Murchison, planning to spend A$3.7 billion expanding the Jack Hills iron ore mine in the area, want to develop the Oakajee port and rail project to open up the Mid- West region for iron ore exports to Asia. State Premier Colin Barnett visited China last week in a bid to lure financial backing for the project.
Expenditure and short-term work programs for Oakajee and Crosslands Resources Ltd., responsible for the Jack Hills project, “are being scaled back whilst a commercial solution is being sought,” today’s statement said.
Murchison’s strategic review of the projects, announced July 4, to help the company meet funding obligations or “otherwise unlock value for its shareholders” is ongoing, it said. Iron ore is used to make steel.
Oakajee Port & Rail in August 2010 signed initial agreements with potential customers of the project including Karara Mining Ltd., a venture between Gindalbie Metals Ltd. (GBG) and China’s Anshan Iron & Steel Group and Sinosteel Midwest Corp., a unit of Sinosteel Corp. The operation had a planned export capacity of 45 million tons.
Sinosteel Midwest on June 23 said it was suspending work on its proposed A$2 billion Weld Range mine because of uncertainty about the Oakajee development.
Murchison, which today announced a full-year loss of A$16.6 million, fell 3.7 percent today to 52.5 Australian cents at 3:14 p.m. in Sydney trading. It’s lost 59 percent this year. Mitsubishi rose 0.6 percent to 1,756 yen in Tokyo.