Japan's Mitsubishi Corp. has agreed to buy Murchison Metals Ltd.'s 50 per cent stakes in the West Australian Oakajee Port and Rail Project for A$325 million (US$314.9 million), gaining full control of the mine along with its port and rail projects.

The buyout also included the sale of Murchison's 50 per cent holding in Crosslands Resources, which operates the Jack Hills iron ore mine.

The A$325 million deal, however, currently stands as a conditional sale agreement subject to a Murchison shareholder vote in February.

Mitsubishi's acquisition of Murchison Metals Ltd.'s stakes in both projects will now likely make project construction easier, Mitsubishi said in a statement.

"We estimate that this transaction is the best way to provide a clear pathway to completion of the bankable feasibility studies for the projects," Shunsuke Nanami, a spokesman of Tokyo-based Mitsubishi Corp. said in The Wall Street Journal. "If we own 100 per cent then the problems will be resolved, and progress can be made. At the same time, the chance of introducing a new partner will be enhanced."

This early, Posco, the world's third-biggest steelmaker, has signified interest to invest in the iron ore operation in Australia's Mid-West region.

Bloomberg reported Posco is just monitoring developments in the Oakajee Port and Rail Project. It will wait until Mitsubishi finalises a deal to control the assets before it makes any concrete decisions to invest in the project.

Other companies interested in the project include Chinese-owned Sinosteel Midwest Corporation and Mid-West local Gindalbie, which is majority-owned by China's Ansteel.

In July, Murchison Metals Ltd. put up for sale its 50 per cent stakes in the $6 billion Oakajee project as well as Crosslands after it announced it could not sustain construction for the projects.

The development of the Oakajee Port and Rail Project is touted crucial to the development of mining operations in the Midwest, where hundreds of jobs are expected to be created.

After the sale, Murchison Metals Ltd. will be left with one iron ore project in the Pilbara. Sale proceeds from the two projects will be used to cover all outstanding debt, after which its board of directors will consider options and decide on the fate and future of the company.

Shares of Murchison Metals Ltd., which have been steadily dropping since early in the year, propped up late Thursday in Sydney. Shares traded 49 per cent higher at 41 cents, giving the company a market value of A$122 million.