The West Australian reported that Aquila Resources will have to wait until at least March to resolve its funding dispute with West Pilbara iron ore partner AMCI, saying that an arbitration hearing will not be held until February 2013.
The 2 companies, partners with Korea's POSCO in the USD 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 that 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 that 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 rumored to have been seeking a sale of its 25.5% stake in the project with POSCO which holds 24.5% or 14% 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 USD 26 million in 2011, and its accounts also recognized a USD 96 million arbitration decision over a coal sales dispute, enforceable in March 2012.
In addition, AMCI said that it was battling a USD 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.
