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State s port plan in tatters
State's port plan in tatters

The State's port strategy is in disarray after the $6 billion Oakajee development was put on ice and Brian Gilbertson's Jupiter Mines dealt a potentially fatal blow to an expansion at Esperance port.

It comes on top of a bitter $1 billion fight between the State Government and magnate Len Buckeridge over an alternative bulks port for under-strain Fremantle port, and doubts over the $2.5 billion Anketell site in the Pilbara.

Amid a breakdown in talks between Mitsubishi and possible Chinese backers following diplomatic tension, Oakajee chief executive John Langoulant confirmed the port and rail development north of Geraldton was on hold.

Crosslands chief executive Andrew Caruso will be among the casualties with Mr Langoulant to head up both of Mitsubishi's associated plays - OPR and Crosslands - with Mitsubishi swinging its efforts away from the coast to improve the economics of Crossland's $6 billion Jack Hills mine.

Mr Langoulant was adamant the deepwater port would eventually be built and was hopeful that, once the Chinese leadership transition passed, negotiations could restart.

"Mitsubishi doesn't want to mothball anything and mothballing is not in our language," he said.

The Oakajee chief said cutting 70 staff from both ventures was a prudent cost-saving step, and he would soon appoint a "Tier 1" mining house to do a technical feasibility study of Jack Hills, to be finished by the second half of next year. While this stops short of a bankable feasibility study, Mr Langoulant said it would help smooth negotiations if they restarted, by removing an element of risk from the project.

Though giving no timeline for the venture, he said OPR was still the most advanced and best solution for the region and did not expect to be sidelined by a new all-Chinese proposal, given Jack Hills' scale would underpin the port.

China-backed Gindalbie Metals chairman George Jones, who has in the past pitched alternative Chinese options to developing Oakajee, said there was an appetite for investment in Oakajee, but mines and rail and ports had to be split.

The State Government has the right to buy back the intellectual property developed by OPR, but Mr Jones would not be drawn on whether he believed it should exercise its option and seek a new proponent with much of the work already done. But he said he thought Mitsubishi should consider selling out of the project completely if it cannot quickly find new partners.

"As time goes by their intellectual property will be worth less and less - and in five years time it will need to be refreshed," he said.

It comes as Jupiter Mines axed its Mt Ida project, casting doubt on Esperance port's expansion.