Western Australian’s Oakajee Port and Rail project scaled back

The Japanese backers of the proposed $6 billion Oakajee Port and Rail project development in Western Australia, have slashed jobs and spending, casting serious doubt on the project’s future.

The project was to build a shared rail network to connect mines in the Mid West region to a new deep water port at Oakajee, north of Geraldton.

Oakajee Port and Rail says Mitsubishi has decided to cut spending to the project because of current economic conditions and the slow process of securing a Chinese equity partner.

OPR and Crossland Resources have slashed more than 70 jobs, reducing its staff to 44 people.

The company says it will focus on developing its Jack Hills mine in the region until economic conditions improve.

OPR’s chief executive John Langoulant has dismissed suggestion the company has shelved Oakajee, saying it is just a short-term scaling back of the project.

“This project hasn’t been shelved, what we’re doing is simply pruning some of the costs while the equity discussions are occurring between Mitsubishi and prospective partners,” he said.

But resources analyst Tim McCormack from Patterson Securities believes otherwise.

“It’s another nail in the coffin for the short-term development of Oakajee,” he said.
“Oakajee will happen”

The Premier Colin Barnett says he will not give up on the development of the Oakajee project.

Mr Barnett has defended his involvement in the project and told State Parliament he is confident it will eventually proceed.

“I will not give up, this Government will not give up,” he said.

“And I tell you Mr Speaker, Oakajee will happen. There are 13 billion tonnes of iron ore that will find its way to market.”

However, the State Opposition Leader Mark McGowan says the scaling back of Oakajee is a major blow for Mr Barnett.

“The Premier needs to take responsibility for what he said was his number one project and one in which he interfered in the commercial processes, which were already in train,” he said.

“And that interference, I think sent the wrong messages to the investors in this project.

“He adopted the role of a businessman rather than the role of a Premier of Western Australia.

“And when you intervene in business decisions as a politician, the outcome is often not good.”

Source : abc.net.au

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