what iron ore policy Media Release27th April 2006MINISTER...

what iron ore policy Media Release
27th April 2006
MINISTER BOWLER’S EXPLANATIONS DISMAY CAZALY
Cazaly Resources Ltd (ASX: CAZ) has today expressed dismay at the explanations provided by
the State Government for terminating its Shovelanna lease.
Joint Managing Directors Nathan McMahon and Clive Jones said the reference by WA Resources
Minister John Bowler to the “State’s Iron Ore Policy” would be a complete mystery to the mining
industry.
Mr Jones said: “What Iron Ore Policy? I’ve been working in the mining industry for more than 20
years and I was certainly not aware of it until it was raised by the Department of Industry and
Resources during the submissions process. This is certainly going to be big news to the rest of the
mining industry.
“How can a company possibly operate in an environment where you don’t know what the rules
are, or what policies exist. It’s ludicrous.
“Furthermore, we understand that a policy can not override any legislation enacted by State
Parliament. The Mining Act is the sole legislation governing mining in Western Australia.
“The so-called policy:
(a) Discriminates against new entrants to the iron ore industry;
(b) Is contrary to the provisions of the Mining Act and is therefore unlawful; and
(c) Is hopelessly out of date and out of step with current conditions in the mining industry.
Mr Jones endorsed Mr Bowler’s comments surrounding the need for long-term tenure.
“Cazaly accepts the need for long-term tenure and it’s our understanding this was precisely why
the State Government adopted State Agreement Acts to cover relevant reserves,” he said.
“The Shovelanna licence held by Rio Tinto was not a part of any State Agreement Act area and
therefore remains under the jurisdiction of the Mining Act. If Shovelanna was such an important
asset for Rio Tinto, why has it never been included in a Statement Agreement Act?
“Surely the key point is the development of the State’s iron ore resources – not warehousing public
assets to be used to the benefit of any single company’s commercial interest.
“The clear facts are that Rio Tinto have held this tenement via associated parties for more than 30
years and have not shown any desire to develop it.
“Rio Tinto has an appalling record of exploration over the ground – having not drilled a hole for
more than 20 years.
“Cazaly Resources is best placed to develop the Shovelanna ore body and be able to quickly
respond to the increases in demand that Minister Bowler refers to. Within three years of having
access to the ground production would have started producing a royalty stream of around $17M
per annum to the State on today’s prices.
“The Minister’s decision has effectively killed off new investment from Cazaly Resources whilst
protecting one party’s commercial interest.”
Finally, Mr McMahon said using the argument that “the rent was paid but the courier was late”
should be universally rejected.
“Partial compliance with the Mining Act is NOT full compliance,” Mr McMahon said. “The Mining
Act is crystal clear on what is required. For the State Government to simply accept a cheque from
Rio Tinto without the required documentation completely re-writes the Mining Act. You can not
change the umpire’s rules midway through a game.
“The question of how Rio Tinto lost the tenement is irrelevant. Under the Mining Act, all that Mr
Bowler was required to consider was whether there was any reason in the public interest why
Cazaly should not be granted the tenement. Mr Bowler’s statement does not disclose any reason
why he should have terminated Cazaly’s application. His reasons all relate to Rio and its position
– they have nothing to do with Cazaly.
For further comment please contact:
Clive Jones or Nathan McMahon, Joint Managing Directors, (08) 9380 4600
Peter Harris, Professional Public Relations, 0412 124 833