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Tuesday, February 14, 2012

Mitsubishi clear to take control of Australia iron ore project

Tuesday, 14 Feb 2012

Reuters reported that Japan Mitsubishi Corp cleared the last hurdle on Monday to take control of iron ore, port and rail projects in Western Australia which are slated to cost USD 10 billion and which it hopes to fund with Chinese partners.

A spokesman said shareholders in Murchison Metals approved the sale of the company 50% stakes in the Jack Hills iron ore mine and its affiliated Oakajee port and rail project to its partner, Mitsubishi for AUD 325 million.

The deal is due to close on February 20. The long delayed port project is key to opening up a new iron ore province in Western Australia outside the control of dominant iron ore producers, Rio Tinto and BHP Billiton.

The AUD 5.9 billion Oakajee port and rail project and the USD 3.7 billion Jack Hills iron ore expansion project have been held back due to cost blowouts which Murchison could not afford and the failure to line up companies to use the infrastructure.

Murchison biggest shareholder, South Korean steel maker POSCO last year said it was considering buying stakes in Jack Hills and the Oakajee project.

Other potential partners in the infrastructure are Sinosteel which is developing the Midwest iron ore project and Angang Steel Co which is backing Gindalbie Metals' Karara iron ore project.

Last week, Western Australian Premier Mr Colin Barnett said Mitsubishi was due to meet with potential Chinese partners in Beijing later this month to discuss participating in the two projects.

Mr Barnett said "There is a major meeting in Beijing, in the next few weeks, involving Australian companies, the Chinese state owned enterprises, Mitsubishi, some financial institutions from China and that will be the critical meeting and hopefully bringing China formally into the project and moving forward."

(Sourced from Reuters)

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