Padbury Mining no contender for $6.5bn Oakajee iron ore port and rail project in Western Australia

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In an unsurprising announcement for those following the news, Australian Padbury Mining (ASX:PDY) said Wednesday it is axing its multi-billion dollar deal to develop the Oakajee port and rail project in Western Australia’s Mid West.

oakajee-west australia map image www.www-g;obalcommodities.com

In a statement to the Australian Stock Exchange, the company said it had “signed a deed of termination and release in relation to the agreement.”

Padbury, a company with a market value of less than $70 million, told the ASX earlier this month that it had struck a deal with unnamed private Australian investors who would provide $6.5bn in equity to build Oakajee.

The money had been “secured”, Padbury said, and the deal was a “major breakthrough for the company and the region”, which meant the Midwest could finally “exploit its mineral assets.”

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. In mid-April it went into voluntary suspension with the same questions still unanswered, until last week Sydney billionaire Roland Bleyer came out claiming to be the main backer.

Plans to open a deep-water port at Oakajee have been on the drawing board for decades.

A previous proponent of the project, Mitsubishi Corporation, shelved it last year due to weak economic conditions.

The port and rail infrastructure would enable the region’s iron ore miners to be one of the major suppliers of the steel-making material to Asia.

Henry Sapiecha

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