The Western Australia Premier, Colin Barnett, remains confident that construction of the Oakajee Port and Rail project will start in his next term of government, if he is re-elected.
The Japanese backers of the project in the state's Mid West have slashed more than 70 jobs and cut spending, raising concerns the development will not go ahead.
Mr Barnett says Oakajee will get back on track once economic conditions improve.
He has told the ABC's 730WA program that foreign interest in the project will not falter in the interim.
"I'm saying it's delayed for at least two years," Mr Barnett said.
"Investment in the order of $3 billion has gone into that area and there is 13 billion tonnes of ore to be mined and exported." "So I've got no doubt the Oakajee ore deposits, and the rail and the port, will be built and the State Government is still there and we're still prepared to go ahead and fund and own the port," the Premier said.
"It's a difficult project; Multiple players, low grade iron ore, building rail and port infrastructure where there is none." "I'd say it's delayed for at least two years but I believe China will maintain its interest in this project."