PERTH (miningweekly.com) – Japan’s Mitsubishi Corporation has officially suspended work on the multibillion-dollar Oakajee port and rail project and the Jack Hills mine expansion, in Australia's Mid West region.

In November last year, Mitsubishi announced that it would reduce costs and streamline operations at the operating vehicle Oakajee Port and Rail (OPR) and at its Crosslands Resources subsidiary, which was developing the Jack Hills iron-ore project.

However, after failing to find a joint venture (JV) partner to develop the Oakajee infrastructure project, Mitsubishi has now officially suspended work on the project.

Work on the Jack Hills mine expansion has also been halted, and the project would be placed on care and maintenance.

OPR’s CEO John Langoulant, who will resign at the end of the month, was quoted as saying that progressing partnership discussions for the mine and infrastructure projects in the current economic environment had been particularly challenging, even more so than when the November decision was made to reduce expenditure on the project.

“Since we started to slow expenditure in November on the project, because equity partners from Mitsubishi weren't emerging, things really haven't got any better. In fact they've probably got a little bit worse. So this is a prudent and responsible decision by Mitsubishi. It's a tough decision but one that needed to be taken,” Langoulant told the ABC.

The Oakajee port and rail project and the Jack Hills expansion had a combined capital demand of some $10-billion, Langoulant said, and needed the support of an equity partner.

Between the infrastructure and the mine, some 15 staff members would be made redundant, with only seven staff continuing on at the Jack Hills mine, to place it under care and maintenance.

To date, some A$700-million has been invested into the Oakajee project.

Mitsubishi took ownership of the infrastructure and iron-ore projects in February last year, buying out its JV partner Murchison Metals in a A$325-million deal.

The Oakajee project had been expected to consist of a 45-million-tonne-a-year port and rail project.