August 4, 2008
August 4th (Mineweb) – The North West Iron Ore Alliance has further outlined its case for the establishment of third party infrastructure access in the Pilbara, today announcing it has submitted responses to the recent draft recommendations from both the Pilbara Rail Access Interdepartmental Committee (PRAIC) and the National Competition Council (NCC).
The Alliance announced today (Monday) that it intended to play an active role in shaping the framework for a third party access regime by participating in the PRAIC and NCC consultation processes, and remained strongly committed to working towards a constructive solution with other stakeholders in the Pilbara.
Independent Chair of the North West Alliance, Ms Megan Anwyl, said access to existing infrastructure remained a fundamental necessity to the formation of a sustainable, viable and successful junior iron ore industry in the Pilbara.
“We believe that BHP Billiton and Rio Tinto have a legal obligation to allow rail haulage to third parties under their various State Agreements, and that this would lead to a healthy diversification of the iron ore industry in the Pilbara and better social and economic outcomes for its residents and the nation as a whole,” she said.
“If fair and equitable infrastructure access is not granted, some mine sites would not be financially viable, or production could be severely limited due to the environmental, social, financial and potential licensing restrictions relative to the trucking of iron ore,” Ms Anwyl continued. “Further, the State Government has a clear policy preference towards rail over road transport.”
“The four members of the North West Iron Ore Alliance – Atlas Iron, BC Iron, Brockman Resources and Ferraus – therefore have an obligation to their shareholders to negotiate a workable solution for the transportation and shipment of their ore through the Pilbara,” she commented. “We have been very encouraged by the draft PRAIC regime and NCC recommendation, and look forward to providing further input towards the final outcomes through the responses we have submitted.”
Ms Anwyl said one of the key PRAIC recommendations the Alliance had made was to support the need for the appointment of a strong Regulator to ensure a timely, effective and equitable access regime.
“It is important that the interests of all parties are balanced, and that there is an independent body to ensure that this balance is maintained,” she said. “The North West Iron Ore Alliance therefore supports the need for a strong Regulator who would be responsible not only for approving such factors as the pricing and costing of the rail haulage regime, as but also for key issues such as capacity and service level principles, safety principles and capacity modelling principles.”
The North West Iron Ore Alliance was formed in 2007 to support the development of a junior iron ore sector in the Pilbara. The member companies – Atlas Iron, BC Iron, Brockman Resources and FerrAus – have agreed to cooperate on issues such as infrastructure development and access, statutory approvals and community development.
Collectively the members of the North West Iron Ore Alliance have the potential to deliver over 50 million tonnes of iron ore per annum by 2014, generating approximately $165 million in State royalties per annum.
August 4, 2008
August 4th (The Age) – POLITICAL intrigue and rising resources nationalism has raised fresh doubts over Rio Tinto’s grip on its $US6 billion ($A6.46 billion) Simandou iron ore project in Guinea.
Rio has portrayed the proposed development of the huge iron ore deposit as a Pilbara in the making.
And because of its importance as a growth project, it is a key plank in Rio’s defence against BHP Billiton’s $170 billion takeover bid.
But a rattled Rio has revealed that it has received correspondence from Guinean President Lansana Conte purporting to rescind the Simandou mining concession.
Along with its partner in the project, the World Bank’s International Finance Corporation, Rio is studying the issues raised in the correspondence.
Rio said it was “confident that its arrangements are in all respects in conformity with Guinean laws and that it has complied with its obligations”.
It said it had negotiated and executed the mining concession in “full transparency with the Guinean Government”.
Rio’s potential loss of Simandou came as President Conte sacked Secretary-General Mamady Sam Soumah. State TV said Mr Soumah would be replaced by Alpha Ibrahima Keira, the president’s son-in-law.
It was Mr Soumah who first raised tenure concerns for Rio over Simandou in May when he said the Government would be reconsidering the concession because of irregularities in the original agreement. Just as ominous, Guinea’s latest threat to Rio’s Simandou ownership follows the return to Beijing of a Chinese trade delegation offering billions of dollars of investment in Guinea in return for Chinese ownership of resource projects.
There is long-running unease among foreign resource companies in Guinea because of a special committee set up to renegotiate all mining agreements, ostensibly to capture a bigger share of the boom in commodity prices.
Even so, Guinea’s Mines Minister, Ahmed Kante, said early last week that Rio’s Simandou iron ore mine was on track and would benefit Guinea and the company.
The question over Simandou ownership could not come at a worse time for Rio. In May, Rio called on the market to start ascribing some value for the project in valuations of the company — an effort to close the widening gap between the imputed value of BHP’s 3.4-for-1 conditional scrip bid and Rio’s share price.
But shortly after Rio’s call to the market, the first query on Simandou’s mining concession from the Guinean Government surfaced. Somewhat ironically, it was BHP managing director Marius Kloppers who some time later warned about getting too excited too early about projects subject to high levels of sovereign risk. He used BHP’s bauxite-alumina project plans in Guinea as an example.
Rio has spent or committed to spend $US300 million on Simandou.
July 24, 2008
July 24th (Business Spectator) – Australiasian Resources Ltd’s shares have surged 32.6 per cent to $1.585 after it announced it had received a $327 million takeover proposal from Billionaire Clive Palmer, who is planning to establish a new Australian resources group.
The iron ore miner said it had received a takeover proposal from Mr Palmer’s company Resource Development International Ltd (RDI), which already holds a 66.37 per cent stake in Australasian.
Under the proposal, RDI has placed a notional price of $2.20 on each Australasian share. Shareholders who accept the offer would be paid in RDI shares.
Mr Palmer wants to create a resources group to rival BHP Billiton and Rio Tinto and plans to list RDI, and if successful complete its merger with Australasian, by late 2008.
Australasian has been working to develop its proposed $2.7 billion iron ore mine, Balmoral South, in Western Australia with Chinese company Shougang Corp, which has a significant investment in the miner of 6.36 per cent.
It has been reported that Mr Palmer is seeking Chinese investment for his company, and would approach Shougang and Baosteel, seeking financial interest.
RDI will have a portfolio that includes iron ore, with a 10-billion tonne iron ore resource in the Pilbara, nickel, including the proposed Gladstone nickel project and steel mill, and other energy interests.
Through a strategic alliance MEO Australia is set to become the core of the new group’s energy division, while keeping a separate listing.