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The West Australian government says it will continue to work with Oakajee Port and Rail despite the joint venture losing its exclusive rights over the iron ore transport project.
Premier Colin Barnett has been an enthusiastic backer of the project to provide rail lines and a port at Oakajee, just north of Geraldton, to ship out the iron ore reserves of WA's Midwest region.
But the proposed $6 billion project hit trouble when joint-venture partner Murchison Metals was unable to come up with the funds to continue.
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Mr Barnett said on Wednesday that from January 1, Oakajee Port and Rail (OPR) would no longer have exclusive rights over the project.
That was in line with a December 31 deadline for Murchison and its joint-venture partner Mitsubishi to complete a strategic review aimed at restructuring the project's ownership.
Mitsubishi has signalled plans to purchase Murchison's interest in the project and seek another partner.
"Oakajee will be built, Western Australia needs a deepwater port in the midwest to unlock the region's potential," Mr Barnett said in a statement.
"The state government will continue to work with OPR as a proponent, but we will also be considering a broader range of options."
Mr Barnett said the dropping of exclusive rights opened the way for the government to work with industry to attract new partners to the project.
He said the change would create opportunities to attract Chinese investment, reduce the project's capital cost and separate infrastructure development and mining interests.
Mr Barnett said the government encouraged Chinese input as vital because Chinese companies had major interests in Midwest iron ore projects and China was likely to be the biggest customer for the ore.
In a statement, OPR Chief Executive John Langoulant welcomed the continuation of the State Development Agreement with the government for the port and rail project.
He said he expected the recently proposed restructure of OPR's ownership to deliver greater project certainty.
OPR remained the most appropriate vehicle to deliver the project in a timely manner and project planning, engineering and regulatory approvals were well advanced, Mr Langoulant said.
"We share the government's long-held vision of an integrated bulk iron ore supply chain, based on the principle of open access for multiple mines, underpinning creation of a Midwest mineral province," he said.
The WA and federal governments have agreed to put in $670 million between them to fund the port, which would be owned by the WA government.
© 2011 AAP
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