Clayton Utz capitalises on China resources investment through major WA infrastructure deal

Sydney, 24 September 2007: Clayton Utz has advised Perth-based company Yilgarn Infrastructure Limited[1] on a proposed major project that is set to deliver vital infrastructure to Western Australia’s resources sector and also enhance Australia-China investment.

Yilgarn's estimated A$3 billion Oakajee Port and Rail Project will see the construction of an independently owned and operated common-user deepwater port north of Geraldton and a rail network to service multiple iron ore mines in the Mid West region – increasing the production flow of important minerals, particularly iron ore, to China and other countries.

The project will be partly funded by five major Chinese companies — Sinosteel, China Railway Engineering, China Communication Construction Company, China Railway Materials Commercial and Anshan Iron & Steel Group —through a A$750 million equity deal for the development, construction and operation of the infrastructure. China's EXIM Bank and China Development Bank will provide debt financing for the project.

The deal was finalised in a ceremony witnessed by senior members of the Chinese and West Australian governments in the week of the recent Asia Pacific Economic Co-operation meeting. It is the first time such a large group of Chinese state-owned enterprises has invested in an Australian company.

Sydney Corporate partner Susan O’Rourke led the Clayton Utz team advising on the deal, supported by partners Wally McDonald, Peter Wiese and Paul Humphreys.

"We are pleased to have advised Yilgarn on this important project, which will enable the Mid West's commercial mines to develop and expand their investments confident in the knowledge that they will have access to vital infrastructure that will help them to deliver to global markets. For us, this is a new milestone in Chinese investment into the Australian resources industry and the linkage to infrastructure."

Yilgarn Infrastructure Limited Executive Chairman Dr John Saunders described the project as a "long-term, sustainable regional plan with benefits that will flow to the whole State".

Subject to environmental and other approvals, the project is due for completion in 2011.

[1] Yilgarn Infrastructure Limited is an unlisted public company based in Perth, established to supply the mining and resources industry in the Mid West region of Western Australia with efficient rail and port services on an open-access, multi-user basis.