Oakajee doubts spark sell-off in Murchison Metals stock

Shares in troubled junior miner Murchison Metals plunged 23 per cent yesterday as investors savaged the comartificial sand making processpany over its admission that it cannot meet its funding commitments for the $5.9 billion Oakajee port and rail project in Western Australia, which is facing damaging cost blowouts and long delays.

Analysts said the sell-off, in which Murchison suffered its biggest single-day fall to close at 57.5c, was caused by a series of significant broker downgrades as financial estimates released on Monday were questioned and the company's credibility remained under scrutiny. Murchison's shares traded above $6 in June 2007 when it struck an infrastructure and iron ore mine joint-venture agreement with Japan's Mitsubishi, but they have been hammered in recent months amid doubts over the company's ability to deliver the project. The sharemarket carnage came as China's Sinosteel yesterday hardened its opposition to the corporate structure and business case for Oakajee, saying there was nothing new in Murchison's feasibility studies...