gwr potential infrastructure user

Murchison, Mitsubishi Sign A$4 Billion Iron Ore Port Accord

By Jason Scott and Jesse Riseborough

March 20 (Bloomberg) -- Murchison Metals Ltd. and Mitsubishi Corp. today signed a A$4 billion ($2.7 billion) agreement with the Western Australian government to build an iron ore port and rail project in the state’s mid-west.

The deep-water port, 450 kilometers (280 miles) north of Perth, may ship first ore from 2013 with construction scheduled to start from 2010, Premier Colin Barnett said today 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 50:50 venture between Murchison and Mitsubishi, will spend A$160 million on completing a financing study by March 2010, he said.

The port, with a capacity to ship 35 million metric tons of the steelmaking raw material annually, will boost exports from the state with potential users including Mount Gibson Iron Ltd., Atlas Iron Ltd., Gindalbie Metals Ltd., Golden West Resources Ltd. and Asia Iron Holdings Ltd.

Perth-based Murchison, halted from trading on the Australian stock exchange today, rose 5.2 percent to 70.5 cents yesterday. The company, part-owned by China’s Sinosteel Corp., has gained 11 percent this year and has a market value of A$291 million.

The project is dependent on an initial financing study scheduled to be completed by March 31 next year, Barnett said.

To contact the reporter on this story: Jason Scott in Perth at [email protected]; Jesse Riseborough in Melbourne at [email protected]

Last Updated: March 19, 2009 21:35 EDT