Aquila gives go-ahead to Pilbara mine

Aquila Resources has lived up to its own prediction by announcing conditional approval for its West Pilbara iron ore project in order to block its joint venture partner buying the project out from under it.

Aquila has approved development at the site, subject to securing finance and placed limits on price blowouts and delays at the site, saying it will pull out if costs rise by more than 5 per cent or delays exceed three months.

Joint venture partner American Metal & Coal International (AMCI) had threatened to buy Aquila out of the $5.8 billion project after the companies disagreed as to when it should proceed.

AMCI wanted to go ahead immediately, while Aquila was keen to wait on the results of a second feasibility study.

AMCI won, with the first ore on ship expected by February 2014, although Aquila is already expecting that date to be delayed.

The project still needs native title and heritage agreements, as well as ministerial approval, expected by mid-next year.