gbg wants karara project exempted from mrrt

PERTH (miningweekly.com) Magnetite developer Gindalbie Metals has asked the policy transition group (PTG) to exempt the Karara project from the mineral resources rent tax (MRRT).

Gindalbie, which released its September quarterly report on Friday, said that the Western Australian project should be exempted from the 30% mining tax on iron-ore and coal profits, because of the value-adding nature of the magnetite project.

Karara is more comparable to a nickel or bauxite project, both of which have been exempted from the MRRT, the company said.

However, in the event that an exemption was not granted, modelling based on the current known parameters of the MRRT have indicated a minimal impact on Karara, owing to the low value of the magnetite ore after mining and primary crushing, and prior to processing.

The Karara project was being developed as a joint venture with China second-largest steelmaker, AnSteel. The project would consist of a small-scale hematite operation, along with a long-life magnetite concentrate operation with the potential to produce more than 30-million tons a year, for a 35-year life-of-mine.

Gindalbie said that first production at Karara remained in line with previous forecasts of mid-2011 for hematite production, and the December 2011 quarter for magnetite concentrate production.

Work was currently under way on all areas of infrastructure to support the Karara project, including the water pipeline, the rail spur line, power transmission lines and the Geraldton port facilities.

During the September quarter, total commitments to the Karara project reached A$1,2-billion.

A revised project construction cost estimate of over A$1,97-billion was outlined during the June quarter, and the current forecast remained in line with that estimate.

The construction cost estimates covered all construction costs for the stage-one production level of eight-million tons a year of magnetite concentrate and up to three-million tons a year of hematite.

http://www.miningweekly.com/article/gindalbie-wants-karara-project-exempt-from-mrrt-2010-10-15