Mitsubishi puts Australian iron ore project on hold

Mitsubishi’s US$5.9 billion Oakajee port and rail iron ore project and Jack Hills mine expansion in Western Australia have been put on hold again, as the company failed to find an investment partner to help fund the endeavours.

Oakajee was intended to serve stranded iron ore deposits in the state’s remote Mid West region as a new iron-ore export hub. Instead, it became the latest —but surely not the last— casualty of a downturn in commodity prices.

According to local media, the company that was managing the project said the reasons it slowed down work at Oakajee in November had worsened.

“Progressing partnership discussions for the mine, port and rail project in the current economic environment for commodities is particularly challenging, and is probably now harder than it was in November 2012 when the decision was made to reduce expenditure on the project,” Oakajee Port and Rail CEO, John Langoulant, told The Australian.

Iron ore prices have been hitting historical lows, joining a wide range of commodities suffering from excess supply and slowing demand from China, the world’s main iron ore importer.

In February last year, Mitsubishi paid US$312 million to take full control of the long-delayed venture. Since then the firm held talks with Chinese parties get a partner on board for the expansion of the Jack Hills mine and Oakajee. As talks didn’t go anywhere last year Mitsubishi put the port and rail project on hold with a first round of lay-offs last November.

Langoulant is quitting at the end of June.