Thumbs up for mine-port rail line
The Western Australian government has approved a 570-kilometre railway linking iron ore mines in the state with Oakajee port, a significant step forward for the troubled US$6 billion project.
The decision, announced on the state government's website, was welcomed by Murchison Metals, an Australian-listed mining company which is a shareholder in the port-rail project to ship iron ore, which has been delayed by funding difficulties.
In June, Murchison admitted it had difficulty in coming up with its US$5 billion share of the project, which prompted Western Australia premier Colin Barnett to call for Chinese firms to invest when he met China's National Development Reform Commission (NDRC) on a mainland visit last month.
The delays prompted Sinosteel to suspend an A$2 billion (HK$15.9 billion) iron ore mining project in Western Australia in June. Sinosteel is one of the key customers for the Oakajee project, with its iron ore supply critical to the development.
Barnett said Thursday's approval was a significant step in securing new infrastructure vital to Western Australia's development.
However, he told Australian media that it would not be easy to convince Chinese state firms to invest because they were unhappy about missing out in the original tender process, with Japanese conglomerate Mitsubishi chosen as the joint venture partner.
'I think they will take their time. They're probably inflicting a little bit of pain on us in the sense of 'why didn't you go with China in the first place? Now you're going to have to put up with us taking our time',' Barnett told Fairfax Radio.
Murchison said on Thursday it was in confidential talks with investors, but gave no further details.
Resource-rich Western Australia accounts for nearly three-quarters of the country's exports to China and 80 per cent of Chinese investments in Australia.
However, Chinese investment in Western Australia's mining sector has recently been hit by several fraud investigations. On October 13, Wah Nam International Holdings, a Hong Kong-listed firm, told the Hong Kong stock exchange its chairman Peter Joseph Luk Kin was being investigated by the Independent Commission Against Corruption. Luk is also chairman of Brockman Resources, a Western Australian mining firm. Wah Nam has plans to finance and develop Brockman's A$1 billion Marillana Iron Ore project in the Pilbara region of Western Australia.
Meanwhile, the Australian Securities and Investments Commission is investigating several senior executives of Sichuan Hanlong Group, a Chinese firm that is in the advanced stages of an attempt to acquire Sundance Resources, a Western Australian mining firm, for A$1.65 billion, according to Australian media reports.