China, Japan and ‘mystery local billionaire’ potential developers of Oakajee project
China and Japan seem to be holding a silent confrontation on a remote western Australian beach over the proposed $6.5 billion Oakajee port and rail project, which has the potential to become one of the major suppliers of Australian raw materials to Asia, particularly iron ore.
According to media reports, the Western Australian government is favouring China, as Premier Colin Barnett publicly endorsed Chinese CITIC Wednesday as the most likely builder of the Oakajee project.
The last time locals heard of a concrete and promising proposal to build the touted complex was almost a decade ago, when Murchison Metals, which had declined an opportunity to have a Chinese partner, opted for a Japanese giant Mitsubishi Corporation. The deal, however, flunked after the 2008 global financial crisis, with Mitsubishi Development abandoning it last year.
Hopes were up again last week, as low-profile junior Padbury Mining (ASX:PDY) announced it had secured a $6.5 billion equity investment from an unnamed source to resume the long-awaited development.
"The project has had a 30-year gestation period and it is a game changer for both Western Australian and the Mid West iron ore industry", said the company.
The news sent Padbury shares soaring more than 100% to a high of 5.2 cents.
On the same day, the miner placed itself in a trading halt because it would not name private equity investors it said would fund the deal. By Monday, it has gone into voluntary suspension with the same questions still unanswered.
According to the Sydney Morning Herald, there is mounting rumours that the Padbury saga could have links to a scam that has been targeting cash-starved junior miners in Western Australia over the past year.
The company’s behaviour doesn’t help disperse that theory. Padbury was due to submit more information to the Australian Stock Exchange (ASX) on Tuesday but extended the deadline to Thursday. This morning the firm extended its voluntary suspension once again, saying it needed more time to seek "information in respect of their (the backers) capacity to meet their funding obligations under the agreement.”
Meanwhile, Japanese capitals are carefully watching how the Oakajee story unfolds. Mitsubishi remains involved in the area through its Jack Hills iron ore project, owned and operated by Crosslands Resources, a 50-50 joint venture between Murchison Metals and the Japanese firm.