ASX-listed Aquila Resources Ltd. (ASX:AQA) has announced an updated capital expenditure estimate on their 50%-owned West Pilbara iron ore project, in the Australian Pilbara region. The revised capex came in at A$7.4B, which is an upward revision when compared to the previous estimate.
The company expects to spend in excess of A$2.5B on port infrastructure as a new port will be built at Anketell, and more than A$2.1B on a new rail link.
Baoshan Iron & Steel Co., Ltd. (SHA:600019) holds approximately 14% of the outstanding Aquila-shares, so Aquila Resources was/is mainly looking to China to fund the development of this project. According to Reuters however, the China Development bank is reluctant to sign off on the debt funding, as they are wary of cost overruns as other Chinese companies experienced during the development phase of their Australian iron ore projects.
As the iron ore price plunged below the $100/t mark several times over the past six weeks, it’ll be difficult for Aquila to meet their target date of mid-2013 to start construction at the west Pilbara Iron Ore Project.
> Read the full press release here (pdf)
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