WA Premier Blames Carbon Tax and Resource Tax for Oakajee Delays

Western Australia Premier Colin Barnett has blamed the proposed carbon tax and the minerals resource rent tax (MRRT) for the doubt that now surrounds the multi-billion dollar Oakajee Port and Rail Project.

The project near Geraldton is now facing more than cost increases and delays as it is losing potential users.

The Chinese company Sinosteel has stopped the Weld Range iron ore project till the uncertainty over the Oakajee Port and Rail project is cleared out. The delay in starting the project was costing Sinosteel about a $100 million a year as per the company statement. The production from the mine would have used one third of the Oakajee port and rail capacities.

The Premier said that the $4 billon Oakajee port and Rail project would go on but there was a reshuffle of partnerships to be expected. The project was a joint venture between Murchison Metals and Mitsubishi. However increased costs have made Mitsubishi reluctant to continue. The official estimated cost of the project is now revised to $5.2 billion.

Originally slated for a 2012 completion the delays have now ensure that the facilities will not be ready till 2015. Mr Barnette said that they have six months to bring the whole project together. If they do not manage that by the end of December then it will be reorganized. There is a good chance that Sinosteel may come into the project itself.

Mr Barnett said that the way in which this was set up, first, setting China in competition with Japan, was not a good idea. He added that the Oakajee project had always been a difficult project, involving several mining companies and low-grade iron ore deposits.

Joel Scanlon

Written by

Joel Scanlon

Joel emigrated to Australia in 1995 and worked for five years in the mining industry as an exploration geotechnician, using GIS mapping and CAD software. Upon moving to the North Coast of NSW, Australia Joel worked as a graphic designer for a leading consultancy firm. After that, he ran a successful business providing web services to businesses along the eastern seaboard of Australia. During this time, he developed and launched News-Medical.Net. Joel has been working with AZoNetwork since the company was founded in 2000.

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