AAP

Yilgarn Infrastructure Ltd says it would have made commercial sense for its on-again off-again ally Midwest Corporation Ltd to formally appoint it as its Oakajee port developer in Western Australia sooner.

The two companies announced today that they had resolved their three-week public dispute, concluding discussions late last night on the eve of the deadline to submit the infrastructure proposal to the WA government.

The stoush flared up when iron ore miner Midwest said it required a shareholder meeting to approve Yilgarn's appointment as port developer because Yilgarn and Midwest's takeover suitor Sinosteel Corporation were associated parties.

The dispute put Midwest's port proposal in jeopardy because the shareholder meeting would have taken place after the proposal deadline had lapsed, leaving the door wide open for rival iron miner Murchison Metals Ltd as the sole proponent under the limited tender process.

A week ago, the Australian stock exchange (ASX) said a shareholder meeting was not required.

Midwest's response was a pledge to nominate Yilgarn before the tender deadline.

Having now formalised their alliance with documentation, the companies have agreed to release each other from all legal claims arising from the quarrel and submitted their proposal on time.

Oakajee Port & Rail, Murchison's equal joint venture with Mitsubishi, also announced today that it had delivered its proposal on time.

Yilgarn executive chairman John Saunders told AAP that he welcomed the end of the conflict with Midwest, given that Yilgarn had planned the proposal over the past two and a half years at a cost of tens of millions of dollars.

"It's an important milestone, achieved a little late but nevertheless it's there," Dr Saunders said.

"Midwest had a very complex environment once the shareholding of Sinosteel turned into a hostile takeover.

"From my point of view, it would have been commercially sensible to resolve it much earlier.

"The final view of the ASX could have been known earlier and would have led to less diversion of time.

"If you try to maintain optionality and flexibility too far into the future, you avoid making business decisions.

"We didn't drop any of our work program."

Yilgarn has arranged a 75 per cent debt finance component supported by China's EXIM Bank and the China Development Bank.

Dr Saunders said the remainder of the $3 billion cost would be funded with equity.

"Costs inevitably go up but it depends on how clever you are.

"Everyone is being fairly silent about numbers."

Dr Saunders said a recommendation on a preferred proponent should be made to WA's Infrastructure and Planning Minister Alannah MacTiernan next month.

"(Then) there is an intensive period of six months or so for the negotiation of the detailed documentation for the project," he said.

"It would allocate rewards and risks between land leases and corridors and between the Environmental Protection Authority, so I don't believe until the end of that negotiation process that a decision can be taken.

Dr Saunders said activity in the mid-west would step up from the beginning of 2009 "when the clarity around this (tender) outcome is known towards the end of this year".

Presuming Yilgarn/Midwest are successful tenderers, Dr Saunders said Yilgarn could begin constructing the development by the middle of next year.

The infrastructure is required to service the mid-west's iron ore mines.

Sinosteel's $1.37 billion bid for Midwest closes on June 5.

Midwest's shares closed steady at $6.26 and Murchison's shares finished two cents lower at $4.30.