NEWS & ANALYSIS From Ken Court to Li Ping, Oakajee saga ongoing Plans by a private Chinese group to revive the multi-billion dollar Oakajee port project add a new twist to a 45-year saga.

LIMITED: Geraldton port has little capacity to grow March 25, 2010 beyond current annual volumes of 16mt. Photo: midwestports.com.au

Mark Beyer small-scale project that would use [email protected] the existing Geraldton port, but @AMarkBeyer was urged to think big and pursue A NEW deepwater port has long a larger project that would under- been considered the key to open- pin development of the new port ing up the development of Western at Oakajee. ’s Mid West. While the ambitious proposal The area holds vast deposits of initially raised hopes in the region, iron ore and other minerals, but is the 1997 Asian Financial Crisis and serviced by a single port heavily resultant collapse in steel prices constrained by its location next to doomed the project as An Feng Geraldton’s city centre and unable reined-in its growth plans. to accept large Cape-class vessels. Kingstream went into admin- Oakajee, a windswept spot about istration in 2001 but re-emerged 20 kilometres north of Geraldton, two years later after a major finan- was identified as the preferred site cial restructuring as Midwest for a new port back in 1972. Corporation. One year later, the Labor govern- Midwest and Murchison Metals, ThisThis takeovertakeover arguablyarguably signalledsignalled ment led by premier which was founded in 1997, were the highhigh point ooff ‘China Inc’ paypayinging struck a deal with the first of many some of the -based ASX too muchmuch foforr AAustralianustralian assetsassets TwoTwo biddebiddersrs companies hoping to open up the stocks that rode the iron ore boom during the boom years. At the peak of the boom in Japan’s Mitsubishi was backing region’s iron ore reserves. during the 2000s. Around the same time, another 2007, two consortia were compet- the competing Oakajee Port and The Iron Ore (Murchison) Each had ambitious plans – Mid- Chinese steel maker, Ansteel, was ing to develop the new port and Rail consortium. Authorisation Agreement Act west wanted to develop the giant partnering with ASX-listed Gind- associated rail lines. In July 2008, the Labor govern- 1973 was designed to help the now Weld Range deposit, while Mur- ablie Metals to build the $3 billion Their backers added a geopolit- ment of selected long-forgotten Northern Mining chison sought to develop the Jack Karara iron ore project, inland from ical overtone to the commercial OPR as its preferred proponent to Corporation develop a new port- Hills mine. Geraldton. bidding. develop Oakajee. and-rail link to planned iron ore The key problem for both pro- In addition, there were several Yilgarn Infrastructure was The early signs were promising. mines. jects was their remote location, other groups seeking to develop backed by Chinese interests and In mid 2009, Ansteel said it The state agreement subse- more than 500km from the coast. smaller iron ore projects in the was closely aligned with Sinos- planned to investigate the viability quently passed to Kingstream However, that issue was over- region. teel Midwest. of a steel mill at Oakajee. Steel, which spent all of the 1990s come as both companies gained Collectively, these projects were At one stage it claimed the In early 2010, Sinosteel Midwest, working on its plans for a steel mill. heavyweight backing in the midst capable of producing more than 50 1973 state agreement, still held Gindalbie Metals and Crosslands Chaired by Ken Court, brother of the China-fuelled iron ore boom. million tonnes of iron ore per year. by Midwest, gave it the right to Resources – a joint venture between of then WA premier Richard Court, Japan’s Mitsubishi Corporation That’s well above the capacity develop Oakajee, but that idea Murchison Metals and Mitsubishi and led by chief executive Nick partnered with Murchison, and of Geraldton port, which handled was quickly shot down by the – were selected as potential foun- Zuks, Kingstream had backing China’s Sinosteel Corporation 15.9mt of goods in the year to June state government, which said dation customers of the port. from Taiwan’s An Feng Steel Co. outlaid $1.2 billion to take over Mid- 2018, including 12mt of iron ore. the agreement was well past its However, planning for the port It initially intended to develop a west Corp in 2007. The solution was Oakajee. use-by date. ran up against multiple challenges.

14 businessnews.com.au | October 8, 2018