Xstrata looks to sue over report * Andrew Trounson * March 07,...

Xstrata looks to sue over report

* Andrew Trounson
* March 07, 2007

GLOBAL mining giant Xstrata is considering suing the West Australian Government or individual politicians over a corrupted 2004 parliamentary report that it claims cost it $17.5 million in a dispute over a vanadium mine it shut down.
Capitalising on revelations from the Corruption and Crime Commission, the Swiss-based miner this week wrote to more than 100 politicians claiming it had been the victim of a corrupt smear campaign.

Evidence from the CCC has revealed that disgraced former premier Brian Burke, working on behalf of Xstrata's disgruntled mine partner PMA, had cast doubt on Xstrata's reputation by doctoring the findings of a parliamentary inquiry into the circumstances of Xstrata's 2004 decision to permanently shut its Windimurra mine.

In the letter, a copy of which has been obtained by The Australian, Xstrata said the revelations were "truly extraordinary and of major concern to us" and that "we are now considering our options".

Amid industry speculation that Xstrata could target the state Government itself as well as PMA, an Xstrata spokesman yesterday declined to comment on what action the miner might take but said the company was considering "all options".

The letter - signed by Xstrata's most senior Australian executives, coal boss Peter Coates and copper chief Charlie Sartain - has been sent to all West Australian parliamentarians as well as John Howard and Treasurer Peter Costello.

"Xstrata and its executives were publicly vilified and many stakeholders, including some politicians and the media, chose instead to believe the words of now totally discredited Western Australian politicians and lobbyists who were engaged in a deliberate and co-ordinated smear campaign against Xstrata and its executives," it says.

The state's former resources minister, John Bowler, has admitted to the CCC that he allowed Mr Burke and PMA to rewrite key findings from the parliamentary report.

PMA, which earned a royalty from the mine and was angry at its closure, used the inquiry to accuse Xstrata of shutting down the mine in a bid to manipulate world prices and favour its own South African vanadium operations at Australia's expense.

PMA had separately launched legal action against Xstrata over the mine closure. According to Xstrata, the report was a key factor in its eventual decision to settle out of court with PMA, in which it agreed to pay $17.5million and hand over the mine site.

"The now totally discredited report was then used to coerce Xstrata into settling its dispute with PMA," Xstrata says in the letter.

The report also provided ammunition for then premier Geoff Gallop and other state politicians to lobby Canberra to veto on national interest grounds Xstrata's takeover bid for iconic Melbourne mining house WMC. Mr Costello ultimately rejected such pressure and allowed the bid, only for BHP Billiton to trump Xstrata with a higher $9.2 billion offer.

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watso has no time for the multinationals, but considering the available information, which has been revealed, then watso hopes that those who benefitted from the doctored report, end up paying the price. of course, a lot of people bought shares in pma, in good faith - and watso would not be happy if they lost something