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Mid West Development Commission

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Mid West Development Project (Oakajee)

Proponents:  The Oakajee port and northern rail is expected to be developed largely by the private sector. The State and Commonwealth Governments have committed $678 million towards common-use port infrastructure, which includes the breakwater, navigational aids, channel, turning basin and port-related activities. LandCorp (the WA State Government’s land development arm) is the proponent for the adjacent strategic industrial estate .

Value: Construction of the deep water port and northern rail link is estimated to cost around $6 billion, dependent on final designs

Location:  Oakajee is located approximately 20km north of Geraldton in Western Australia’s Mid West. It is roughly bordered by the Buller River to the south, Coronation Beach road to the north and the Moresby Ranges to the east.

Description: Oakajee has been identified for approximately 30 years as a potential site for a deep water port and industrial estate. Successive studies have confirmed this view. The estate and a surrounding buffer zone has been acquired by the State Government and a Structure Plan has been developed.

The Oakajee Industrial Estate is planned to comprise approximately 6,500 hectares of land owned by the WA State Government. Of this, 1,100 hectares is zoned for strategic industry and 200 hectares is zoned for support industry. The property is currently farmed and awaits connection to services including power, water and gas.

The northern rail is expected to link the resource rich Murchison sub region (highly prospective for iron ore) to the proposed deep water port at Oakajee and the associated industrial estate.  The southern mines also intend to connect to the Oakajee port via southern rail infrastructure.

Status and next steps:

Oakajee Port and Rail Pty Ltd (OPR), a joint venture between Mitsubishi Development Corporation and Murchison Metals, was the successful respondent to a Request for Proposal process conducted by the State Government and was selected to build and operate the port and rail infrastructure at Oakajee.

On 20 March 2009, the State Government and OPR signed the Oakajee Port and Rail State Development Agreement (SDA).

The SDA appointed OPR on an exclusive basis as the infrastructure provider for the port and an open access rail line servicing northern Mid West iron ore mines.

In March 2011, it was agreed to defer the Sunset Date under the SDA to 31 December 2011. The granting of the new Sunset Date was subject to a number of conditions.

In July 2011 Murchison publicly advised that it did not have the financial capacity to deliver the Project and in November 2011, agreed to sell its interests in OPR as well as Crosslands Resources Ltd, the owner of deposits and the mining project at Jack Hills, to Mitsubishi.

In December 2011, it was agreed that the SDA would continue from 1 January 2012 but on a non-exclusive basis. This means OPR no longer has exclusive rights to the project and it is now open to the involvement of other parties. 

As of 1 January 2012, the State Government continues to work with OPR in the development of the project, but can engage with other parties interested in developing Oakajee and consider other approaches to delivering the project.

In February, Mitsubishi completed the $325 million transaction to take Murchison’s 50% position in the Oakajee Project and Crosslands so that Mitsubishi now has 100% ownership of the Oakajee Project and the proposed mining project. Mitsubishi has indicated that it does not wish to hold 100% of the project and it will seek strategically aligned equity partners or investors to bring the project to fruition.

At Mitsubishi’s request the State Government has assisted discussions with the Chinese Government as a potential equity partner in the project. The Department will continue liaison with the Chinese Government and Mitsubishi in relation to China’s assessment of the Oakajee Project given the substantial Chinese investment in the Mid West. The State’s interest in these discussions is in ensuring a region wide solution, with the priority to see an open access port and rail development that unlocks the potential of the entire region.

OPR continues as the infrastructure provider for the project and will continue to progress the approvals program and negotiations with potential customers.

The Mid West Development Commission is actively supporting the development of the Mid West Development Project (Oakajee), the Oakajee Industrial Estate and associated rail infrastructure through its Mid West Strategic Infrastructure Group and direct involvement with the mining industry and other key stakeholders.

Mid West Development Commission Contact: Project Manager, Anne Finlay 9921 0786

Last updated: 8/03/2012

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