Time running 'short' for Oakajee

WA Premier Barnett finally confirms Oakajee extension but time is running out for mines in need of infrastructure

Time running 'short' for Oakajee
Time running ‘short’ for Oakajee

By Anna Game-Lopata | March 4, 2011

After considerable deliberation, WA Premier Colin Barnett has finally confirmed an extension to the deadline for a final decision on the future of the Oakajee Port and Rail project (OPR).

Barnett says the extension was granted following agreement from OPR proponents to abide by new "rigorous" requirements for project reporting and finalisation.

"The extension is the best way to secure infrastructure vital for the future both of the Mid-West and Western Australia," the Premier says.

"There are mines already into construction in the Mid-West and they require a railway to transport the ore and a port to export it from so the time is getting short."

"I have always said that the Oakajee project is complex; not least because of the number of players and the scale of the infrastructure."

The original deadline set under the Oakajee State Development Agreement (SDA) signed in March 2009, was for OPR key project implementation agreements to be signed by March 31, 2011.

The milestone date has now been extended to December 31, 2011.

At this time by which time OPR joint venture partners Mitsubishi Development Corporation and Murchison Metals are expected to have finalised all feasibility studies and made a commitment to proceed.

"The partners must also have demonstrated that they have contracts in place with foundation customers and reached agreement with the State Government regarding the construction of the project and operation of the infrastructure," Barnett says.

If major hurdles are identified in this period and the State Government considers the project to be at risk, Barnett says the proponents and the Government will jointly address these issues, including restructuring the joint venture to bring in new partners.

Barnett says under the revised timetable, construction is now expected to commence in the first quarter of 2012 and port operations are expected to commence in 2015.

"There will be no further extension to the deadline unless there are exceptional circumstances," he says.

"This is a massive undertaking and important progress has already been made in developing infrastructure that will help create a new iron ore province and major new investment in Western Australia."

"So far the proponents have spent more than $300million on detailed technical and financial studies, design work and communication with potential port users, local industries and Mid-West communities.

"For our part, the State Government has committed $678 million in Federal and State funding for common user facilities at the port which includes the channel, breakwater, turning basin, navigational aids, provision for tug and pilot boat pens, port administration offices and roads and utilities.

These facilities will be made available to port users on a commercial basis.

"We are also investing in planning to ensure that the Mid-West has the serviced industrial land, workforce skills and community facilities to enable it to benefit for the opportunities this project will generate."


Murchison Metals, which holds a 50 percent stake in the OPR project along with Mitsubishi, says notwithstanding the extension, the parties aim to complete the implementation agreements as soon as possible.

"Murchison also confirms that completion of a Bankable Feasibility Study for the infrastructure project is in line with the revised
schedule," the company says in a statement.

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

Murchison Executive Chairman Paul Kopejtka says the extension will ensure optimum progress is maintained for the Oakajee project.

"It is a world scale project pivotal to the unlocking of the mineral riches of WA’s mid-west and we are committed to seeing it developed in the best interests of everyone involved – the Government, the miners and the people of Geraldton and the mid-west," Kopejtka says.

"Our OPR team is working hard, and with great confidence, to complete the feasibility work so that project financing and construction can follow as soon as possible thereafter.

"The certainty provided by this extension will greatly assist in delivering these vital projects in the most timely and optimum manner."

The State Government’s decision to extend the date for execution of the implementation agreements means that OPR retains the exclusive right to develop the infrastructure project.

Kopejtka confirms Murchison and Mitsubishi have agreed to additional reporting commitments to the WA Government and to complete, by the end of 2011, key activities necessary to make a commitment to proceed with the Oakajee project.

"This includes the feasibility studies and the conclusion of formal supply chain agreements with OPR’s Foundation Customers including Crosslands." he says.

Murchison and Mitsubishi have also confirmed their commitment to consider third party investment in the project in future, should it be deemed appropriate to do so.

The Oakajee infrastructure project involves construction of a multi-user deepwater iron ore port with an initial capacity of 45 million tonnes per annum at the greenfields Oakajee site, 25km north of Geraldton, and associated heavy haulage rail infrastructure serving the mid-west region of WA.

You can also follow our updates by joining our LinkedIn group or liking us on Facebook


Trucks For Hire | Forklifts For Hire | Cranes For Hire | Generators For Hire | Transportable Buildings For Hire