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Cazaly loses iron ore battle with Rio

Shm.com.au

April 18, 2008 - 6:15PM
Cazaly Resources has lost its three-year battle with Rio Tinto over the ownership of the Shovelanna iron ore deposit after the High Court refused an appeal.

The High Court's refusal to grant Cazaly's special leave to appeal effectively ends the bitter stoush for the lucrative iron ore desposit in Western Australia.

"This decision is welcomed,'' Rio Tinto iron ore chief executive Sam Walsh said. "It confirms that due process was followed by the Western Australian Minister for Resources.''

Cazaly swooped on Shovelanna in Pilbara region in 2005 when Rio Tinto's license over the tenement expired after a courier failed to deliver documents on time.

The junior arranged financial backing for a potential development and signed an agreement with BHP Billiton to process the ore before the tenement was stripped from the company by the state government and handed back to Rio Tinto.

An appeal by Cazaly to the Supreme Court of Western Australia to wrest back control of Shovelanna was dismissed in August.

Cazaly shares entered a trading halt today prior to the hearing of the company's application for special leave to appeal the Shovelanna decision before the High Court in Canberra.

The company's shares last traded at 21 cents.

Cazaly joint managing director's Nathan McMahon and Clive Jones were unavaialble for comment.

Shovelanna has sat in the portfolio of Rio Tinto and its partners - Gina Rinehart's Hancock Prospecting and Michael Wright's Wright Prospecting - since 1981.

Little work was conducted on the tenement after a 130 million tonne resource was defined.

Cazaly's shares surged to a high of $2.40 before the tenement was handed back to Rio Tinto in April 2006 after the then WA resources minister John Bowler used his discretion under the states Mining Act.