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Aquila shares fall 4.5% on budget dispute

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PERTH, Feb 4 AAP

February 04 2013, 12:40AM

Aquila Resources shares were more than four per cent lower after the minerals explorer was unable to agree on a proposed budget for its West Pilbara Iron Ore Project.

Aquila and its joint venture partner AMCI (IO) Pty Ltd were unable to agree on the remaining 2012/2013 financial year budget.

It has also agreed to maintain the project on minimum expenditure for the remainder of the financial year.

It comes a week after Aquila received the green light from the West Australian government to develop Anketell Port as part of its $6 billion iron ore project.

The federal government will now consider whether to also approve the project, in which Aquila holds a 50 per cent stake.

The dispute was referred to arbitration in September 2012.

"Aquila advises that it has given notice to AMCI which Aquila considers brings to an end the arbitration about the budget for the 2012/2013 financial year," Aquila said in a statement.

"Aquila will continue to focus its efforts on how best to progress the Project.

At 1200 AEDT Aquila shares were 14 cents, or 4.5 per cent, lower at $2.98.

The coal producer has been moving into iron ore and developed proposals for two key mines in WA's Pilbara region.

Integral to the project is the proposed port development at Anketell.

The planned development of the port is crucial to Aquila securing the majority of the $3 billion in funding it needs for its iron ore project.