Aquila considering Fortescur port JV again

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Sep 2011

Aquila Resources is again considering a joint venture with Fortescue Metals to develop a multi-billion dollar iron ore export port planned for Western Australia's Pilbara.

The companies currently have rival proposals to develop the port at Anketell Point, which will service the iron ore region's small- and mid-tier miners who cannot access spare capacity at the congested Port Hedland facility.
And each company says its proposal is superior.
But a person familiar with the situation has told AAP that Aquila is again open to the prospect of forming a joint venture with Fortescue to develop Anketell Point.
Fortescue, a $14 billion iron ore miner, and Aquila, a near $2 billion coal miner that is expanding into iron ore, in mid-2009 inked a co-operation agreement to look into whether a joint development of Anketell Point was appropriate.
Instead, the parties had pursued their own separate plans.
Certainly, the WA government is keen to see Anketell Point developed jointly, no doubt in light of lessons learnt from the stalled Oakajee port plan for the Mid West region.
Oakajee is in danger of collapsing because the proponent, Japan-backed Murchison Metals, does not have enough funds to develop the $5.9 billion facility.
Observers say this predicament would have been avoided if Murchison and rival Midwest Corporation, now owned by China's Sinosteel, had not been pitted against each other in a competitive tender process to develop Oakajee and had instead worked together.
Equally, the chances of Anketell Point getting off the ground would be greatly enhanced if Aquila and Fortescue joined forces, combining funds and expertise.
Fortescue has this in spades, having already built its own record-breaking port and rail network in the Pilbara, ending BHP Billiton and Rio Tinto's infrastructure dominance in the region.
Aquila, too, understands ports well, given its coal export activities in Queensland.
A key point of contention that must be overcome, however, is the port's start-up capacity.
Aquila wants to begin with capacity of 80 million tonnes per annum (Mpta) to allow the port to commence operations quickly, with commissioning slated for 2014.
While both foresee a port that can be expanded up to 350 Mpta and used by multiple miners, Fortescue wants to kick off with a larger initial development, so its plan could take longer before exports can commence.
Aquila believes that its plan is more modular, allowing for easier capacity expansions, while its environmental approvals are more advanced.
The port plan is part of Aquila's 50 per cent held, $6 billion West Pilbara project involving an iron ore mining operation and a rail line to the coast.
Fortescue needs a new port because it will not have enough spare capacity at its Port Hedland facilities when its iron ore production reaches 155Mtpa, from a current rate of 55Mtpa.
Aquila chief executive Tony Poli is currently in China finalising a funding agreement with China Development Bank for the West Pilbara project.
Aquila seeks about $2 billion in debt and expects about $1 billion will come from cashflow and asset sales.
Fortescue was being sought for comment.
Source: AAP