Murchison Metals Investors Approve Sale of Iron Ore, Port and Rail projects to Japan Mitsubishi Corp
Shareholders of Murchison Metals have approved on Monday the sale of the company's 50 percent interest hold in the Jack Hills iron ore mine and its affiliated Oakajee Port and Rail project in Western Australia to joint venture partner, Mitsubishi Corp of Japan. The deal was worth A$325 million ($347 million).
Following the sale, Murchison Metals will need to downsize and restructure its board, where 14 jobs will be lost, the ABC News reported. Shareholders, meanwhile, would need to wait for up to six months at least to get their cash, the Sydney Morning Herald reported.
Some three-quarters of Murchison Metals 20 employees in Perth will lose their jobs, but have been ensured with redundancy payments.
Murchison had been having difficulties funding its share into the A$5.9 billion Oakajee Oakajee Port and Rail project in the Mid West, as well as into the $3.7 billion Jack Hills iron ore expansion project. Last year, it signified it was selling its 50 per cent interest in the Oakajee Port and Rail project to Mitsubishi. In turn, Mitsubishi tendered the rescue bid in November, five months after Murchison Metals made the announcement plea.
After deducting transaction fees and debt repayments, a total of $217 million will be left with Murchison Metals. With the absence of a noteworthy project, the company said it will explore other investment opportunities.
"We'll look at anything in the resources sector," Greg Martin, Managing Director of Murchison Metals, said.
"Some of our shareholders have expressed some preferences to be in certain minerals rather than others but, at the moment it's an open book."
Ken Scott-Mackenzie, Murchison Metals Chairman, along with Mr Martin, will stay on to oversee repayment of debt facilities, the likely cash return or possible future investment. Most of the directors of Murchison Metals have signified resigning immediately after settlement.
The $6-billion Oakajee project has been pushed as crucial to the emerging midwest iron ore region, according to WA Premier Colin Barnett.