Sinosteel Midwest Corp, a unit of Sinosteel Corp, has suspended work on a US$2.1bn iron ore project in Western Australia because of uncertainty about the development of the Oakajee port and rail development.

Bloomberg reports that: "The completion date for the Oakajee port and rail project has pushed out from 2012 to a forecast not before the end of 2015, with further delays likely," said Sinosteel, which wants to ship ore from its Weld Range mine through the proposed port.

Mitsubishi Corp and Murchison Metals Ltd, which are planning the A$4.3bn port and rail development, were given a nine-month extension by the state government in March on a decision to proceed with the project.

Murchison, which delayed the project's launch in November, said last month it expects to get debt-funding offers in the December quarter.

Oakajee Port in August signed initial agreements with potential customers of the project including Karara Mining Ltd, a venture between Gindalbie and China's Anshan Iron & Steel Group, Sinosteel Midwest and Crosslands Resources.

"We are certainly not closing the door on Weld Range, however we must make the right business decisions in order to protect our assets and ensure a realistic future for our organization," said Julian Mizera, coo, in a statement.

The company is planning to ship 15Mt of iron ore from Weld Range through Oakajee, which is near Geraldton, 430km north of Perth.

Sinosteel will continue its mining operations at Koolanooka and Blue Hills, exporting through the port of Geraldton, it said.