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)

Murchison gets Oakajee extension from W. Australian government

Friday,Mar04,2011

The Australian iron ore exploration company Murchison Metals Ltd (Murchison) has announced that the government of Western Australia has agreed to grant an extension to the State Development Agreement (SDA) for the Oakajee port and rail infrastructure project in Western Australia.

Murchison and its partner in the Oakajee project, Mitsubishi Development (Mitsubishi), a subsidiary of Mitsubishi Corporation of Japan, requested the extension following their announcement of revised project schedules for the Oakajee infrastructure project and the proposed expansion of the Jack Hills iron ore project on November 4, 2010.

The Jack Hills expansion project aims to expand current operations from nearly two million mt a year to 35 million mt a year, with an extended mine life of 25 years.

First shipments of ore through the new Oakajee Port are expected in late 2014/early 2015.

Tags: iron ore , raw mat , Australia , Oceania , investments , mining, Mitsubishi Development, jack Hills iron ore project

Murchison's ore shipments fall, costs rise

By David Fickling From: Dow Jones Newswires

January 27, 2011 12:53PM

IRON ore shipped by Murchison Metals fell by more than a third on the year in the three months to December 31, while production costs rose and production shifted toward lower-value varieties of the commodity.
Murchison said in a second-quarter activities report that ore shipments fell 35.6 per cent, from 499,328 tonnes in the second quarter of the company's 2009-10 financial year to 368,041 tonnes in the same period this year.

The results narrow the margin of error for Murchison as it pushes ahead with its Oakajee Port & Rail project, an ambitious joint venture with Mitsubishi to build a new port capable of exporting 45 million tonnes a year of iron ore from Western Australia's Midwest region, a relatively undeveloped iron ore province to the south of the Pilbara.

Start of sidebar. Skip to end of sidebar.End of sidebar. Return to start of sidebar.Net cash holdings dropped from $102.4 million at the end of December 2009 to $31.3m on the same date last year, with a $21.1m outflow of cash to pay for feasibility studies relating to Oakajee.
The company in November signed a 12-month deal with US investor Resource Capital Funds allowing it to draw on a $US100m finance facility at a rate of 10 per cent.
Shipments of higher-value lump ore were down 67 per cent to 120,479 tonnes, while the ore grade dropped from 65.1 per cent iron to 62.4 per cent. Shipping of lower-value fines rose 83.5 per cent to 247,562 tonnes while the grade also declined, from 63.6 per cent to 61.1 per cent.
Cash costs rose to $110 a tonne from $84 a tonne in the previous quarter, while the average selling price was $138 a tonne, Murchison said.