Green light for Murchison's Oakajee sale

28 Dec, 2011 08:53 AM
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MURCHISON Metals has been given the green light to sell its half of the troubled $5.9 billion Oakajee Port and Rail project to venture partner Mitsubishi.

The company announced today that the Foreign Investment Review Board had no objection to the proposed $325 million deal, which will give Mitsubishi total control of Oakajee and the Jack Hills iron ore project in the mid west.

FIRB approval was one of the conditions of the sale, which will effectively put a major piece of Australian infrastructure into foreign hands.

The sale to Mitsubishi must still pass a Murchison shareholders vote scheduled for February 2012.

The announcement comes after last week's settlement between Murchison Metals and Chameleon Mining, which followed four years of litigation.

The settlement will see Chameleon receive $20 million from the sale of Murchison's interests in Oakajee and Jack Hills parent Crosslands.

Murchison also announced today that the state government has extended a development agreement for the project beyond the December 31 deadline, after some amendments.

The deal means Oakajee no longer has exclusive rights to build the port and rail project.

Murchison said in a statement: "As expected, OPR's exclusive right to negotiate implementation agreements for the project will lapse at the end of the month, and the State will be entitled to explore options with other parties."

"However, the State and OPR will each remain obliged to use reasonable endeavours to finalise the implementation agreements, port services agreement, third party access regime, port and rail leases, and other relevant documentation."

The Oakajee project stalled in June after Murchison Metals revealed it didn't have the money to proceed.

WAtoday

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