West Pilbara cheap as chips?

Aurizon Holdings Ltd , which teamed up with Chinese steel giant Baosteel to gain a 50 percent stake in the West Pilbara Iron Ore project in Australia, expects the port and rail cost to come in well below a 2012 estimate of A$4.6 billion ($4.29 billion).

“We can’t quantify it at the moment. But our expectation is that the numbers will be very materially different, i.e. better, than the ones that were anticipated in those 2012 numbers,” Aurizon CEO Lance Hockridge told Reuters in an interview on Thursday.

And? If iron ore is at $70 then WP iron ore will be uneconomic.

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About the author

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.