Oakajee bites the dust

From the AFR:

The future of the $6 billion Oakajee Port and Rail project in Western Australia has been cast into further doubt, with Japanese owner Mitsubishi to freeze spending and pare back its workforce on the troubled venture.

Mitsubishi’s efforts to reinvigorate the project have been stymied by weakening iron ore prices, ongoing global economic volatility and an inability to attain the cooperation of Chinese parties with iron ore interests in WA’s mid-west region, which Oakajee was to service.

…As part of the planned restructure, Mr Langoulant is expected to take over as the boss of both OPR and Crosslands Resources, another 100 per cent owned subsidiary of Mitsubishi. Crosslands has been developing the $4 billion Jack Hills iron ore mine in the mid-west.

Of the 115-strong workforce across the two companies, 71 are expected to be made redundant in the coming weeks.

That does not sound like a lot of doubt to me. It’s dead.

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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Comments

  1. Mining BoganMEMBER

    More than a few of my fellow bogans have invested heavily…nay, very heavily in Geraldton property. Called me a gloomy gus when I expressed doubts on everything going through.

    One day soon I’m gonna be needing a bullet-proof jacket…

  2. Most of us here in the West never thought it would really fly…briefly looked like a good idea when ore prices made even small ore bodies a long way from the coast look attractive enough to invest in the expensive infrastructure required to export them. The State involvement in the project was largely driven by Barnett who saw it as a marvellous opportunity to deliver some jobs to a stretch of the state which, frankly does not have a lot going for it otherwise. That concept and the times allowed a lot of State money to be poured into funding the feasibility studies, approvals process etc. Nowadays it is fast turning into a liability for Barnett.

  3. Buying a fibro shack for 1 million in the expectation you can rent it out for $2000 a week to some poor mug.
    Charles Darwin would have loved it.

  4. The City of Geraldton is quite a livable place in it’s own right and the improvements to the foreshore are quite nice. Big enough to have a few doctors surgeries, regional museum, art gallery with good exhibitions, tourism.

    The secret to a towns/cities success seems to be a base hospital, a university, a defence base. These things allow/attract young people to stay and provide a diversity of employment and attitudes that enriches the city over and above providing employment.