Aquila study positive for Pilbara projectPublished 3:39 PM, 5...

Aquila study positive for Pilbara project

Published 3:39 PM, 5 Jun 2012
Last update 4:33 PM, 5 Jun 2012
AAP

Aquila Resources is a step closer to realising its $6 billion West Pilbara Iron Ore project after studies showed it was economically and technically feasible.

Aquila is a coal producer but wants to join the ranks of iron ore miners, and released on Tuesday feasibility studies on two key proposed mines in the project in Western Australia.

Despite Tuesday's rise, Aquila's share price is still near a three-year low and down more than 51 per cent this year.

The company has fought legal battles with Brazilian giant Vale, its joint-venture partner in its Queensland coal projects over which port to ship coal from the Eagle Downs project in that state, and the two have disputed the timing of building infrastructure.

Aquila said the West Pilbara studies found the Mt Stuart Iron Ore Joint Venture (JV) could produce 289 million tonnes over 16 years.

The Red Hill JV could contemplate production of 70 million tonnes over 14 years.

Aquila is yet to confirm it has won the right to build a new port for the project at Anketell Point in WA, which is crucial to secure the majority of $3 billion in funding needed to develop the project.

WA Premier Colin Barnett has made positive comments about Aquila's chances compared to rival Fortescue Metals Group.

However, there are concerns about whether Aquila can fund the integrated mine, rail and port development and has been selling many of its coal assets to raise cash.

A feasibility study on the complete project is expected before the end of the year, with $400 million already spent on its development.

First iron ore shipments are targeted for 2014.

Aquila is a 50 per cent partner in the project with US private group American Metals and Coal International, which is controlled by South Korean global steel giant Posco.

At 1615 AEST, shares in Aquila had risen 2.50 per cent to $2.86 against a benchmark index rise of 1.47 per cent.

http://www.businessspectator.com.au/bs.nsf/Article/Aquila-study-positive-for-Pilbara-project-UY84K?OpenDocument&src=hp7