The Todd Corporation has signed a deal with the West Australian government that could lead to a $5.9 billion iron ore project in the state.
The company, owned by New Zealand's richest family, has been building up its presence in West Australia for the past two years and the new project could ship 50 million tonnes of iron ore a year.
More than 3000 jobs would be created during construction and 910 workers would be recruited during production if Todd Corporation goes ahead with the Balla Balla project.
Premier Colin Barnett said Todd's Balla Balla Infrastructure Group was planning to build a new iron ore export facility on the Pilbara coast between Karratha and Port Hedland, with a 162km railway linking it to iron ore deposits in the central Pilbara.
Privately-owned Todd has spent millions of dollars buying into the mining industry in the state.
In August 2015, Todd bought Rutila Resources, increasing its ownership in the Balla Balla Infrastructure Group (BBIG) to 90 per cent, according to Todd Corporation. BBIG's projects are located in the Pilbara, and include the iron ore project, an approved port facility at Balla Balla and the development of the railway line.
The group's other shareholder is a trustee for the N.A. Curtis Superannuation Fund.
The group said today's agreement was a "crucial milestone" for the project.
A spokesman said the final investment decision was expected next year and construction could begin within months. The group was in discussion about the provision of debt and equity, he said.
Todd last year built up a 52.6 per cent stake in Flinders Mines, an ASX-listed iron ore development business.
Flinders' shares are on a trading halt until Wednesday morning.
Barnett said the agreement between Balla Balla and the state government included a requirement for local industry participation and community development plans to be submitted for approval, maximising the benefits of the project for West Australians.
"While there are still a number of hurdles for the proponent, it's estimated when it gets underway, the project will generate 3300 jobs during construction and 910 jobs once operational,'' he said.
"The proposed export facility will use custom-built barges to transfer ore onto ships, reducing costs and environmental impacts."
State Development Minister Bill Marmion said the project showed that despite some economic headwinds, there was still great interest and investment opportunities in the WA resources sector.
The Western Australian reported industry observers as believing the development of the Balla Balla deposit would require iron ore prices to continue outpacing forecasts of US$50 a tonne. Iron ore was trading at US$80.41 on Friday.
However, the State Government believed the jewel in the project is the railway and port, which could unlock billions of tonnes of ore deposits that are stranded inland.
BBIG estimates that total royalties it could pay to the state government would be in excess of A$4b.
The Todd Corporation's history dates back to 1884, and has interests in oil and gas exploration and production, electricity generation, energy retailing, property development, minerals, healthcare and technology. According to the NBR Rich List, the family's total wealth is $3.3b.