CLAYTON UTZ advised Yilgarn Infrastructure Ltd on the proposed construction of the $3 billion Oakajee Port and Rail Project to service iron ore mines in the mid-west of Western Australia.
The project would see the construction of an independently owned and operated deepwater port north of Geraldton and a rail network to service several iron ore mines. This will increase the production flow and export of important minerals.
The project is being partly funded by five major Chinese companies — Sinosteel, China Railway Engineering, China Communication Construction Company, China Railway Materials Commercial and Anshan Iron & Steel Group — through a $750 million equity deal for the development, construction and operation of the infrastructure.
China’s EXIM Bank and China Development Bank will provide debt financing for the project.
The deal was finalised at a signing ceremony in Perth attended by senior members of the Chinese and Western Australian governments in the week of APEC leaders meetings in early-September. It followed an initial signing ceremony in Beijing two weeks beforehand.
“We are pleased to have advised Yilgarn on this important project, which will enable the mid-west’s commercial mines to develop and expand their investments, confident in the knowledge that they will have access to vital infrastructure that will help them to deliver to global markets,” said Clayton Utz lead partner Susan O’Rourke.
“For us, this is a new milestone in Chinese investment into the Australian resources industry and the linkage to infrastructure.”
Yilgarn chairman, John Saunders, said Yilgarn’s “financial engineering” for the project meant China would have a vested interest in the long-term sustainability of the mid-west Western Australia resources sector.
“By forming alliances between Australian and Chinese port and rail engineering expertise to develop this project, Yilgarn offers local companies a pathway to establish new relationships that will provide business opportunities in WA, offshore in China and other parts of the world where Chinese companies are active,” he said
Sydney-based O’Rourke was supported by partners Wally McDonald, Peter Wiese and Paul Humphreys.