Aurizon revealed today that the capital costs had been reduced by 25% or $A1.5 billion to $4.5 billion via value engineering.

The proposed throughput has been lifted from 30 million tonnes per annum to 40Mtpa.

“Ultimately, for this project to go ahead, it needs to be competitive in terms of delivered costs,” Aurizon CEO Lance Hockridge told investors this morning.

Hocking said further cost reductions would be the focus of ongoing work.

“Again, the project will not proceed unless it delivers the targeted returns,” he said.

Earlier this year, project partners Baosteel Resources, Aurizon, POSCO and AMCI pushed back the final investment decision to the end of next year.

As the infrastructure provider, Aurizon delivered an initial non-binding indicative +/-25% tariff for the mine-to-ship supply chain services earlier this year, and is required to submit an indicative and non-binding +/-15% tariff has by November 30.

The partners will meet by the end of the year to review the tariff, initial feasibility studies and make a decision on whether to complete the definitive feasibility study.

If it gets the green light, the DFS plus a binding +/-10% tariff will be due by the end of April next year, with the partners to meet by the end of May to review the data.

Baosteel and Aurizon jointly acquired 50% project owner Aquila Resources last year for $1.4 billion.

The iron ore spot price has almost halved since the offer closed in July last year.

Aurizon posted a $604 million full-year profit this morning.

Shares in Aurizon gained 4% to $5.26.