Premier Colin Barnett knew the $6 billion Oakajee port project had been shelved before he visited Asia last week to drum up participation, but still believes in the project.
The $6 billion Oakajee port project has been officially suspended, after proponent Mitsubishi announced a “slow down” of work in November.
The premier said he was advised of the decision before he went to China and Japan.
“This is a recognition of where the company is up to commercially,” he said in an emailed statement.
"The State Government will continue to work on the delivery of a staged development of the port at Oakajee.”
Oakajee Port and Rail, which was managing the project, announced today that Mitsubishi was suspending further work on the project and also putting its Jack Hills mine expansion on care and maintenance.
OPR said the reasons it slowed down work at Oakajee in November - a difficult economic environment and lack of progress with talks for joint venture partners - had worsened.
“This will unfortunately require further reduction in staff numbers,” OPR said.
Most of the workers at Oakajee and Jack Hills were laid off in November and the remaining skeleton staff of less than 20 people will leave at the end of this month.
About six people will remain as the Jack Hills care and maintenance team.
The company’s chief executive John Langoulant said the move was a difficult but necessary step.
“Progressing partnership discussions for the mine, port and rail project in the current economic environment for commodities is particularly challenging, and is probably now harder than it was in November 2012 when the decision was made to reduce expenditure on the project,” he said.
“The Jack Hills mine and expansion project will be properly maintained so they can be ramped up rapidly when the conditions allow.”
Mr Barnett has just returned from a trade mission in Asia, where he was trying to drum up Chinese involvement in the Oakajee project.
He denied the project was dead in the water, saying with estimates of between 13 and 50 billion tonnes of magnetite iron ore in the region waiting to be developed, port and rail infrastructure would happen someday.
“I will persist, and I am still confident Oakajee will proceed. I can’t put a date on it, but I will not give up on it,” he said.
Mr Barnett said Mitsubishi had advised him about a month ago that it was going to step back from the infrastructure project and concentrate on the Jack Hills mine.
That allowed him to put a proposal to the Chinese Government during his recent visit, which was “broadly agreed” by it.
Mr Barnett said he proposed State would take prime responsibility for the port and allow the Chinese to develop their mines and the railway.
“Ultimately when Jack Hills comes of age, Mitsubishi would concentrate on that and the rail connection there,” he said.
“(Mitsubishi’s) prime interest is their mine. It’s the biggest and it’s also the furthest away from the coast and it has the most complex geology of any mine so it’s not going to develop in the short term.
“Until that mine develops and they make money ultimately, they are not going to be building railways and ports.”
Opposition Leader Mark McGowan said a project which would have provided many jobs for West Australians had been lost.
He laid the blame at the feet of Premier Colin Barnett.
“It’s a great pity that under Mr Barnett’s watch we have lost both Browse and Oakajee now,” he said.
“This Government needs to reflect on its interference in commercial decisions by major investors in WA and make sure that in future they let business get on with business and let Government do government.”
Mr McGowan said Mr Barnett had meddled in the project to the point where investor confidence was lost.