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Mitsubishi & Murchison in $2.7bn Australian Port agreement

Sydney: Murchison Metals Ltd. and Mitsubishi Corp. today signed a A$4bn ($2.7bn) agreement with the Western Australian government to build an iron ore port and rail project in the state's mid-west, writes Bloomberg.

The deep-water port, 450 kilometers (280 miles) north of Perth, may make its first shipments from 2013 with construction scheduled to start from 2010, Premier Colin Barnett told the newswire in an e-mailed statement.

"Oakajee is the single most important project for Western Australia's economic development over the next 50 years," Barnett said in the statement. Oakajee Port & Rail Pty, a joint venture between Murchison (which is part-owned by China's Sinosteel Corp) and Mitsubishi, will spend A$160m on completing a financing study by March 2010, he said.

The port, with a capacity to ship 35m metric tons of ore annually, is expected to boost exports with potential users including Mount Gibson Iron, Atlas Iron, Gindalbie Metals, Golden West Resources and Asia Iron Holdings.

Murchison and Mitsubishi will need to raise about A$3bn in the next 12 months to fund construction, Oakajee Port & Rail ceo Christopher Eves told reporters at a briefing in Perth. "We're confident we'll raise the funds," he said. "The financing market we'll go to in 12 months time will likely be different to the one now."

The project, which will create 2,000 jobs during construction and employ 400 workers on completion, is dependent on an initial financing study, which is scheduled for completion by March 31 next year, Barnett said. He didn't rule out the possibility of the port being used to ship out uranium exports.

Government funding will total A$678 million, to be used to develop a heavy industrial estate, with Barnett saying he's confident the federal government will contribute half of that amount.  [24/03/09]

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