Australia: Parties Confirm Schedule for Oakajee Project

Mitsubishi Development Pty Ltd and Murchison Metals Ltd, the joint venture partners of Oakajee Port and Rail (OPR), have confirmed their confidence and commitment to the development of the new 45 mtpa deep water port at Oakajee and the 570 km rail project to Western Australia’s mid-west mines following a detailed review of the project’s timeframe.

The timeframe review has been undertaken as the detailed engineering study of the project’s infrastructure draws to a conclusion, as negotiations with the three foundation customers on detailed supply chain arrangements are about to step up and as negotiations with the State on the Implementation Agreements for the port and rail constructions enter their final stages.

The conclusion of this review is that OPR anticipates supply chain negotiations with customers will be concluded by mid 2011.

In addition, OPR anticipates its environmental reviews for the port and rail infrastructure would be finalised by Q3 2011 and its main indigenous heritage approvals would be finalised in Q4 2011. These approvals are essential to enable construction to commence.

On this basis and following funding arrangements to be finalised, OPR anticipates commencing pre-work construction late in 2011, with Project Go Ahead targeted for late 2011/early 2012.

OPR Chief Executive John Langoulant said that the project had been subject to an exhaustive review and that he was pleased with the outcome and strong commitment made by both joint venture partners to the project. He pointed out that considerable progress had been made which included: Draft Bank Feasibility Study submitted to the State in March 2010; Memoranda of Understanding signed with three potential foundation customers in August 2010; Environmental impact assessment well advanced; Heritage and Native Title negotiation framework agreements with relevant Aboriginal groups; Rail corridor finalised; Land access agreements with 60 freehold and pastoral leaseholders to enable feasibility works; Project due diligence underway with the State, foundation customers and suppliers; and Implementation Agreements substantially progressed with State agencies.

“This is a very large infrastructure project that has few equals in the world let alone Australia. The need to coordinate the outcome of three foundation mines with the development of the port and rail infrastructure is complex as the differing circumstances of the mines need to be accounted for in setting reasonable timeframes for the development,” he said.

The extension in the project’s timeframe has been discussed with the Premier and a formal proposal to extend the time by which the Implementation Agreements are to be executed with the State has been made. The State Development Agreement provides for such variations to be agreed.
Mr Langoulant said that while the commencement of construction would fall into late 2011/early 2012 he pointed out that this represents an approximate 6 month extension to OPR’s current schedule.
“A six month extension in a project of this scale and with its projected 50 year life is minor”, Mr Langoulant said.

[mappress]

Source: opandr, November 4, 2010;

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