Sinosteel drops Aussie iron ore project
By Richard Fu |
June 24, 2011, Friday
|
Print Edition
Print Edition
SINOSTEEL Corp has shelved its A$2 billion (US$2.1 billion) iron ore project in Australia's Midwest region because of uncertainty in the development of transport infrastructure.
Sinosteel Midwest Corp, a unit of Sinosteel, yesterday said setbacks in developing the Oakajee deep-water port and rail project have made its Weld Range iron ore mine unviable.
It has suspended all major work at Weld Range, laid off 43 workers and closed a local office.
Weld Range, one of the largest investments by China in Australia's mining sector, was a foundation customer for the Oakajee project, a venture equally owned by Australia's Murchison Metals Ltd and Japan's Mitsubishi Corp.
But the port project is facing delays due partly to cost overruns.
The completion date for the Oakajee port and rail project has pushed out from 2012 to a forecast not before the end of 2015, with further delays likely, Sinosteel Midwest said.
Sinosteel Midwest added the lengthy delays would cost it A$100 million per year.
"We are certainly not closing the door on Weld Range, however we must make the right business decisions in order to protect our assets and ensure the realistic future for our organization," said Julian Mizera, chief operating officer of Sinosteel Midwest.
The Oakajee project has two other foundation customers - Karara Mining Ltd, a joint venture between Australia-based Gindalbie Metals Ltd and China's Ansteel, and Crosslands Resources Ltd.
Sinosteel Midwest Corp, a unit of Sinosteel, yesterday said setbacks in developing the Oakajee deep-water port and rail project have made its Weld Range iron ore mine unviable.
It has suspended all major work at Weld Range, laid off 43 workers and closed a local office.
Weld Range, one of the largest investments by China in Australia's mining sector, was a foundation customer for the Oakajee project, a venture equally owned by Australia's Murchison Metals Ltd and Japan's Mitsubishi Corp.
But the port project is facing delays due partly to cost overruns.
The completion date for the Oakajee port and rail project has pushed out from 2012 to a forecast not before the end of 2015, with further delays likely, Sinosteel Midwest said.
Sinosteel Midwest added the lengthy delays would cost it A$100 million per year.
"We are certainly not closing the door on Weld Range, however we must make the right business decisions in order to protect our assets and ensure the realistic future for our organization," said Julian Mizera, chief operating officer of Sinosteel Midwest.
The Oakajee project has two other foundation customers - Karara Mining Ltd, a joint venture between Australia-based Gindalbie Metals Ltd and China's Ansteel, and Crosslands Resources Ltd.
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