Aquila Resources has joined BHP Billiton in announcing spending cuts in the Pilbara, casting doubts over whether the Tony Poli-backed company will be able to meet self-imposed time frames for its flagship $7 billion West Pilbara iron ore development.
The announcement of the cuts, in an Australian Securities Exchange statement yesterday, also came less than a fortnight after Premier Colin Barnett questioned whether Aquila had the balance sheet strength to develop the Anketell Port, which is the development's key link.
The WA Government is yet to make a ruling on Anketell's development, much to the frustration of Aquila which has long been lobbying for the port development rights.
Aquila shares fell 27¢ to $2.42.
Aquila yesterday blamed "changed broader macroeconomic environment" for the decision by it and joint venture partner ACMI to conserve cash expenditure on their West Pilbara project.
Mr Poli would not disclose the value or scope of the cuts but described the move as "fine tuning" before construction of the ambitious mine, rail and port project was due to begin in "the first or second quarter of next year".
Aquila wants to be in production by 2016.
The saving initiatives came because the company was looking to get all the approvals at West Pilbara in place before spending, he told _WestBusiness. _
"The Government has started a process to acquire the land at Anketell Port. There's also the issue about the port's proponents and we're still waiting for mining leases to be granted and compensation agreements," Mr Poli said.
"Clearly we are waiting until we get all our ducks in a row before we start spending some serious money," he said
Aquila needs about $1 billion to fund its half share of the West Pilbara project and the construction of a new port at Anketell.
In response to Mr Barnett's comments earlier this month, Mr Poli yesterday said he "sympathised" with the Premier's statement. "Clearly what we need to do is demonstrate that we have the funding for the project, and that's what we're working towards," he said.
