THE WEST AUSTRALIAN
Thursday, 13 December 2012 09:21
Aquila Resources will have to wait until at least March to resolve its funding dispute with West Pilbara iron ore partner AMCI, saying yesterday an arbitration hearing will not be held until February.
The two companies, partners with Korea's POSCO in the $7.4 billion West Pilbara mine port and rail project, have been at odds since September over the annual development budget for the stalled project. Aquila said yesterday a full hearing for the dispute was set for arbitration in February, with a decision likely by March.
Even arbitration proceedings may not solve the problem, with Aquila saying yesterday any ruling would not be binding, except for the "identification of a vendor participant whose venture interest may be acquired by the other participant at fair market value".
AMCI is rumoured to have been seeking a sale of its 25.5 per cent stake in the project with POSCO - which holds 24.5 per cent - or 14 per cent Aquila shareholder Baosteel the most likely candidates.
Though doubt remains whether long running discussions over debt funding will be resolved anytime soon, AMCI also faces its own financial constraints.
According to AMCI's latest financial statements, lodged with the Australian Securities and Investments Commission in October, the Australian group parent company posted an after-tax loss of $26 million in 2011, and its accounts also recognised a $US96 million arbitration decision over a coal sales dispute, enforceable in March 2012.
In addition, AMCI said it was battling a $169 million tax bill after an Australian Taxation Office audit of its 2004 to 2007 financial statements led to an amended tax bill for the 2005 year.
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