West Pilbara takes step forward
Queensland coal hauler Aurizon's bid to become a Pilbara iron ore player has taken a key step forwards after American Metals & Coal International and Posco signed up to an infrastructure framework agreement.
The deal with AMCI and Posco means all of the partners of the West Pilbara iron ore project (WPIOP) have now agreed in principle to support Aurizon’s rail and port infrastructure plans.
AMCI and Posco own 50 per cent of WPIOP.
The other 50 per cent is owned by Aquila Resources, which was taken over by Aurizon and Baosteel earlier this year in a $1.5 billion deal.
Baosteel, which is more interested in the iron ore production, holds 85 per cent of Aquila and Aurizon, which will focus on the infrastructure, 15 per cent.
AMCI and Aquila had been at loggerheads for more than a year leading to this year’s Aquila takeover, squabbling over funding of the mine and infrastructure projects as well as working budgets.
In a statement today, AMCI president Hans Mende said his company was pleased "past issues are behind us".
"The agreement (with Aurizon) brings together parties that can genuinely underpin delivery of one of the most exciting resource projects on the globe," Mr Mende said.
"We're committed to making this greenfield iron ore project a commercial reality and helping establish a new phase of economic investment in Australia."
Kimok Yun, senior vice president of Posco’s raw materials department, said the South Korean giant was “pleased” to be part of the development discussions.
“All four parties are heading in the same direction and we look forward to working together to progress the project,” Mr Yun said.
In order to get there the project needs a new deep-water port at Anketell and a 280km railway to support the 40 million tonnes a year project.
Under an ambitious timeline outlined by Aurizon and Baosteel, the West Pilbara project plans to ship first ore in 2017 or 2018.
To meet the timeframe, work on the Anketell port, rail and mine development needs to start in 2016 at the latest.
Aurizon owns 15 per cent of Aquila Resources, which was taken over by Baosteel - which owns 85 per cent - in July. While Korean giant POSCO owns 49 per cent of AMCI's joint venture stake.
Aurizon chief executive Lance Hockridge said its job was to deliver a "commercially-attractive and scalable infrastructure solution".
Aurizon has a period of exclusivity to develop a plan for the project, which was today extended until up to January 2016.
