Aquila Resources Ltd says it is continuing to plan the development of a new iron ore export port in Western Australia, despite potential joint venture partner Fortescue Metals Group Ltd putting on hold an associated project Fortescue, Aquila and the Metallurgical Corporation of China Ltd (MCC) in March submitted a concept plan to the WA government to jointly develop a multi-billion-dollar port at Anketell Point in the state’s Pilbara region.
The development, near Rio Tinto’s Cape Lambert facilities, would allow Fortescue, Aquila and MCC to export iron ore from their respective projects, without relying on Rio Tinto to give them access to Cape Lambert. Aquila wants the new port and associated rail to support its West Pilbara iron ore project. Fortescue aims to use it to transport iron ore from its Solomon project, which it recently shelved due to a lack of funding support, blaming the federal government’s planned new mining tax.
Aquila general manager of iron ore Russell Tipper said the company would go it alone if Fortescue decided it could not participate. However, there was strong potential for Chinese investment in the new infrastructure. “We’ve been working on that port for the past three years … we’ve done all of our analysis on the basis that we may be the only party that is there,” Mr Tipper told AAP from Shanghai on Friday. “(Fortescue chief executive) Andrew (Forrest) thinks it is a good idea but he hasn’t done much on it. “We have a cooperation agreement with FMG for them to … share some information to see if they would be interested in jointly developing it with us. “We’ve also had discussions with MCC, which has a project right where the port is going to be.”
“We might find that we’re the only party to underwrite the initial development.” Mr Tipper said Chinese parties were keen to see the project proceed because it would mean more iron ore output from the Pilbara. “I’m expecting we’re going to get some pretty good support (from the Chinese) and that could come in the form of the market supporting us in terms of taking our ore or also the potential to have some Chinese investment, be that equity or debt.” A definitive feasibility study into the West Pilbara mine and associated infrastructure will be complete in coming weeks, providing an updated capital cost estimate.
The pre-feasibility study in 2008 flagged a $4 billion price tag. While the project was on Friday granted major project facilitation status by the federal government, Aquila is yet to receive any commitment from the WA government or commonwealth for funding contributions. “We’ll have to work on that,” Mr Tipper said. Also on Friday, Brazil’s Vale moved to full control of the Belvedere coal project in Queensland after exercising its option to purchase Aquila’s 24.5 per cent stake, as previously flagged by Aquila. Shares in Aquila closed 17 cents, or 1.93 per cent, higher at $9.00 while Fortescue shares ended 10 cents, or 2.25 per cent, weaker at $4.15.
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Source: AAP, June 7, 2010;