The Oakajee Mess - Chinese say they would have had Oakajee finished by now

The West reports: One of the world's most powerful bankers, the chairman of China's Import-Export Bank, has reopened the Oakajee wound, declaring that if his country had been awarded the WA Government rights to the crucial Mid West iron ore infrastructure, it would have been built "a long time ago".

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The History

For those that can remember how the events transpired, the rights to build Oakajee were previously held by WA company Yilgarn Construction, a company that was backed with Chinese money. They were progressing toward finalising arrangements for building the port, when Alanah McTiernan and the Labor party decided they would reneg on the agreement Yilgarn owned, and open the right to build the port up to tender.

Small local miner, Murchison Metals, decided it would have a crack and found a partner in Mitsubishi, a Japanese company. They formed a company called Oakajee Port and Rail. OPR was successful in winning the right to build the port and related rail infrastructure over Yilgarn. This was in 2009, keep in mind, when Japan's economy was in the midst of a dive, and the Chinese economy was one of the few in the world that was not in recession. Still, the Japanese backed conglomerate won. 

Also around this time, China had overtaken Japan in becoming our biggest customer. Thus, the Chinese felt somewhat snubbed. They had billions of dollars sitting around itching to be invested, they were our number one customer but were being treated like foreign invaders, and they had actually held a piece of paper that they thought gave them the right to build the port, only to be told by Labor that "we've changed our minds, that piece of paper is too old".


It's now 2013, and little has happened in all that time that would progress toward the building of a port. Quite the opposite in fact. 

Yilgarn Construction had joined forces with local miner Midwest Mining, who sold out to the Chinese and is now known as Sinosteel. Sinosteel decided to down tools completely in the midwest as there was no progress with Oakajee or the rail lines, thus making the viability of Oakajee even more precarious. 

The guys who won the rights, Murchison Metals, found they couldn't even raise their half of the money (Mitsubishi was to provide the other half) to build the thing, and ended up selling their half of OPR to Mitsubishi, completely wiping their hands of the whole fiasco. So now OPR is a fully Japanese company. 

The guy who instigated the whole debacle, former Murchison Mining CEO Paul Kopejtka, jumped ship after it all went pear shaped, deciding not to hang around and make it work. He now works for a mining company looking for coal in Colombia. 

No-one is actually sure what OPR does these days. They appear to have turned their attention to how to mine the Jack Hills Expansion Project. Not actually mining it. Just at the "figuring out how to mine it" stage. And of course they're busy handing out community grants and sponsoring the local football league. 

Everything Geraldton contacted OPR, asking directly "What is the next step in getting oakajee port built and who takes the step?"

Their response is as follows:

“Significant tonnages from long-term mining projects are required to drive a globally-competitive infrastructure solution for the region. This requires the alignment of commercial  interests.

“Dialogue  with the State and other parties continues. The immediate focus is the finalisation of feasibility studies associated with the Jack Hills mine expansion project.”

So more talking taking place, more mining companies needed to actually decide to mine their dirt, and for the time being no clear direction regarding Oakajee port.