The company behind a proposed $6 billion iron ore project in the Pilbara has signed an agreement with a Chinese company to build the port and rail component.BBI Group announced today it had signed a memorandum of understanding (MoU) with China State Construction Engineering Corporation (CSCEC) to build the infrastructure for the Balla Balla project, which will link stranded iron ore mines with export markets.
The MoU was signed at a ceremony attended by Prime Minister Malcolm Turnbull and Chinese Premier Li Keqiang in Canberra today.
Balla Balla is expected to employ 3300 workers during construction and create 900 permanent jobs once in operation.
The MoU specifies that CSCEC use Pilbara sub-contractors for all “on-the-ground” delivery and confirms BBI’s commitment to maximising opportunities for local and regional businesses and employees where possible, rather than using fly-in, fly-out workers.
Today’s agreement follows January’s signing of a State Agreement between BBI and the former State Government over the project.
BBI Group chairman Jon Young said the partnership between BBIG and CSCEC represented another significant milestone for the Balla Balla project and a step towards BBI reaching a final investment decision and a start on construction in 2018.
“To have signed such an important MOU for our project in the presence of the Australian Prime Minister and the Chinese Premier confirms the strength and international significance of the Balla Balla project,” he said.
The project ultimately involves building a 6-10 million-tonne-a-year iron ore mine near Whim Creek, between Port Hedland and Karratha and a 160km railway line that would link stranded iron ore deposits to a new port at Balla Balla.
Todd Corporation, which counts the Balla Balla deposit in a vast investment portfolio spanning energy, minerals and health care, has been building its Pilbara resource base for years. Last year it took over iron ore hopeful Rutila Resources and secured a majority stake in Flinders Mines, which owns the Pilbara Iron Ore Project to the south.
CSCEC is one of the world’s largest construction companies and one of the biggest companies in China.
It delivers large-scale projects, including port and rail infrastructure, and operates in 20 countries around the world.
BBI Group is jointly owned by New Zealand’s Todd Corporation and Nyco, an investment company owned by Sydney businessman and former Lynas Corporation boss Nic Curtis.
BBI is yet to make a final investment decision on Balla Balla or secure financing for the $6 billion project.
Its future will be dependent on the iron ore price remaining buoyant.
Yesterday the spot iron ore price was $US86.36 a tonne.