Oakajee Port & Rail Pty, planning a A$4 billion ($3.2 billion) iron ore port and rail project in Western Australia, is in talks to buy building materials and get funding from Angang Steel Co. and other Chinese companies.
Oakajee Port, a venture between Mitsubishi Corp. and Murchison Metals Ltd., has also held talks with Japanese mills and South Korea’s Posco, Chief Executive Christopher Eves told reporters today.
Iron ore producers in Australia have sold shares and brought in Chinese investors as they sought funding amid the global credit crunch. Steelmakers could help Oakajee Port with export-related financing in return for building materials purchases, Eves said today.
“I need to buy rail and the iron ore goes to Angang, for example, which makes rail,” Eves said at a media briefing in Geraldton, Western Australia, today. “Export-related finance provision to OPR we see is certainly one avenue” to help fund the project, he said.
Eves will travel with Western Australian Premier Colin Barnett to China at the end of July to talk to suppliers of material and equipment, he said.
Oakajee may make its first shipments from 2013 with construction scheduled to start from 2010, according to Barnett. Perth-based Murchison and Japan’s Mitsubishi will need to raise about A$3 billion in the next 12 months to fund construction, Eves said in March.
BHP Billiton Ltd., the world’s biggest mining company, said this month it will pay Rio Tinto Group $5.8 billion to create a venture covering the companies’ Western Australian iron ore assets. The tie-up will benefit Oakajee Port & Rail, Eves said.
“If you’re a steel mill in China and you had Rio Tinto competing against BHP and now they’re in a joint venture together, the next logical place to look” is Oakajee, Eves said.
Oakajee Port & Rail expects to make announcements by July 1 on hirings and the appointment of a project managing contractor, Eves said.
Source: Bloomberg
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