Australia's Aquila: no deal yet on $7.7 bln iron ore project

PERTH Thu Nov 29, 2012 9:53pm EST

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PERTH Nov 30 (Reuters) - Aquila Resources said it had not yet reached an agreement with its partners on their A$7.4 billion ($7.7 billion) iron ore project in Western Australia but was hopeful of a resolution early next year.

Aquila aims to build the mine, rail and port with annual iron ore production of 30 million tonnes, but the project has been stalled by a delay in securing funding and regulatory approvals.

A budget dispute between Aquila and its partner AMCI (WA), a joint venture between private mining investment and trading group American Metals and Coal International (AMCI) and steel giant POSCO, is further complicating matters.

The partners had been in talks to conserve funds but had not been able to agree on a budget for the 2012/13 financial year.

"Aquila remains hopeful that this will be resolved in early 2013," Aquila said in notes for speeches at its annual meeting on Friday.

The West Pilbara Iron Ore project is one of the biggest in a $280 billion pipeline of planned resource investments in Australia that may be frozen or delayed as funding dries up amid concerns about the outlook for iron ore and coal, and escalating costs.

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