AusRAIL, Market Sectors

Oakajee signs key deals, but project is challenging: OPR

<span class="" id="parent-fieldname-description"> Oakajee Port and Rail (OPR) has signed three foundation customers to ship iron ore on its rail and deepwater port in Western Australia. </span> <p>By Jennifer Perry<br /><br />OPR signed memorandums of understanding with Karara Mining, Sinsosteel Midwest and Crosslands Resources. </p><p>The MOUs are a “positive step” towards the alignment of regional needs to underpin the development of WA’s mid-west region, OPR said.</p><p>Chief executive John Langoulant said the strong interest shown by miners for the initial start-up capacity and beyond, and the recent positive findings of OPR’s feasibility study, provided a solid platform for the project’s development.</p><p>However a company spokesperson told <em>Rail Express</em> that the project has “many challenges”.</p><p>Langoulant reportedly tipped the project to cost $500m more than current estimates last week, however, the spokesperson said “at this stage” the joint venture anticipates the cost to be upward of $4bn.</p><p>“That hasn’t changed,” the spokesperson said.</p><p>“The total cost is dependent on the final scope of the project, which will become clearer as an outcome of feasibility studies currently being undertaken.”</p><p>Despite challenges, OPR said that it is achieving its milestones “against our plan”.</p><p>“The next phase of the project is completion of studies and agreements with miners and government, which is expected to take us through to the end of the year,” the spokesperson said.</p><p>“This will include completion of feasibility studies, as well as the negotiation and execution of implementation agreements with the government and supply chain agreements with miners.</p><p>“Pending those outcomes, in 2011 we expect to move into the detail for the project, including finalisation of approvals and early procurement processes. This will pave the way for the planned commencement of construction in 2011 leading to schedule commissioning of the port and rail in 2014.”</p><p>OPR will create a deepwater port 25km north of Geraldton linking to regional mines by approximately 550km of rail. The rail will reportedly be built to Pilbara standards and will have an axle capacity of 32 tonnes.<br />Current plans are a “base case” of 45 million tonnes per annum shipping through the port.</p><p>“This is our focus at present,” the spokesperson said.<br /><br /><br /><br />&nbsp</p>