Murchison Metals Ltd. (MMX.AU) and joint venture partner Mitsubishi Corp. (8058.TO) said Thursday they have increased the planned initial capacity of their A$4 billion Oakajee iron ore port development by 29% to 45 million metric tons a year and identified three potential foundation customers.

The pair are partners in Oakajee Port & Rail, or OPR, which is developing the new port to service the emerging midwest iron ore producing region in Western Australia state.

OPR Chief Executive John Langoulant said the increase of planned initial capacity to 45 million tons from the previous level of 35 million tons followed strong interest from regional iron ore miners.

"The level of iron ore tonnage nominations we received last month from regional miners made it clear that there is a real case to consider greater start-up capacity than we had originally anticipated," he said.

OPR also announced that it had selected three potential foundation customers for the mine including Crosslands resources, which is another joint venture between Murchison and Mitsubishi focused on developing the Jack Hills iron ore project.

The other two customers were Sinosteel Corp., for material from its Weld range project, and Karara Mining, a joint venture between Gindalbie Metals Ltd. (GBG.AU) and Anshan Iron & Steel Group.

Australia's major iron ore producers, BHP Billiton Ltd. (BHP) and Rio Tinto Ltd. (RTP), have been rapidly expanding their iron ore ports in response to growing demand in recent years.

Now smaller producers are also pressing ahead with their own port projects, with the Western Australian state government this month backing the planned Anketell port in the Pilbara region to be developed by Fortescue Metals Group Ltd. (FMG.AU), China Metallurgical Group Corp. and API Management, a joint venture between Aquila Resources Ltd. (AQA.AU) and private investor AMCI.

-By Alex Wilson, Dow Jones Newswires: 613-9292-2094; alex.wilson@dowjones.com
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