Gas Week

EWN Publishing

West Australian tender to pit a Chinese-funded mining company against one backed by Japan’s Mitsubishi

Posted by gasweek on 10 October, 2007

Under the tender process announced 8 October, Midwest and Murchison will contest to build a multi-user port at Oakajee, north of Geraldton.

According to Andrew Burrell and Paul Garvey, in The Australian Financial Review, (9/10/2007), p. 3, the $3 billion of infrastructure needed to unlock Australia’s next iron ore province has moved a step closer after the West Australian government yesterday set up a tender that will pit a Chinese-funded mining company against one backed by Japan’s Mitsubishi. However, it seems increasingly likely the tender process could send the two warring miners — Midwest Corp and Murchison Metals —back to the negotiating table because the government’s move to split the work into separate pack­ages may be commercially unviable.

High political pressure to get ore to market:The infrastructure plan has been beset by controversy since WA Treasurer Eric Ripper in July called for the China-backed Midwest to be stripped of its right to develop the rail and port facilities in the emerg­ing mid-west region, near Geraldton. Because Midwest holds a long-running state agreement to build the infrastructure, the decision was criti­cised for raising WA’s sovereign risk profile.

Chinese President Hu Jintao leans on Premier: The stoush caught the attention of Chinese President Hu Jintao, who last month lobbied WA Premier Alan Carpenter to make a decision in favour of a Chinese-backed proposal put forward by Perth company Yilgarn Infrastructure.

• Midwest was aligned with Yilgarn, which has debt and equity funding from a range of Chinese companies, while

• Murchison Metals had signed Mitsubishi as its partner to develop the infrastructure.

The Australian Financial Review, 9/10/2007, p. 3

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