PERTH (miningweekly.com) – The much-contested billion-dollar Oakajee port and rail project has been given new life after ASX-listed Padbury Mining announced on Friday that it had secured the funding necessary to construct the $6-billion project.

Private Australian equity investors would provide the funding, which would be executed in three tranches.

The first tranche, which consisted of $470-million, would be used to complete the design and construct specifications over the first nine months of the project, as well as for early civil works and to order long-lead items.

The second and third tranches, of $3.45-billion and $2.55-billion respectively, would be drawn down for project construction.

In return for the investment, the private investors would obtain a 64% stake in Midwest Infrastructure, the Padbury subsidiary that would be developing the Oakajee project. Padbury would retain a 36% shareholding in the subsidiary.

Padbury MD Gary Stokes said on Friday that the development of the Oakajee port and rail project meant that the Mid West region could be exploited for its mineral assets.

The Oakajee development would enable the export of between 35-million and 45-million tonnes of iron-ore, using cape-sized vessels with up to 240 000 t capacity. It was expected that yearly exports could be increased to over 100-million tonnes over time.

The Mid West region is estimated to host some 50-billion tonnes of magnetite ore, of which 21-billion tonnes was compliant under the Joint Ore Reserves Committee reporting code. There are currently 21 companies with iron-ore interests in the region, as well as other commodities that could use the port and rail facilities.

The Oakajee project stalled in 2012 after Japan’s Mitsubishi announced cutbacks to the operating vehicle Oakajee Port and Rail (OPR).

Padbury owns intellectual property on a multi-user rail line and port at Oakajee, which it bought from OPR’s former rival Yilgarn Infrastructure.

Stokes said that Padbury had been focused on delivering a positive outcome for the Oakajee project for the past 18 months.

“It has been an enormous challenge on many fronts, but today’s announcement will see this game-changing project finally come to fruition.”

Midwest Infrastructure would now use the prefeasibility study it acquired in 2009 as the launch pad for completing the concept design of the port and rail project.

Negotiations with the Western Australian government were also under way to formalise development agreements.