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Bloomberg:

Australian Aboriginals May Increasingly Seek Resources Stakes

By Angela Macdonald-Smith

March 31 (Bloomberg) -- Indigenous Australians may increasingly seek equity stakes in resource ventures after an agreement for an aboriginal group to take a stake in a Western Australian potash developer, said one of the negotiators.

An accord announced today between Reward Minerals Ltd. and the Martu aboriginal group is the first time in Australia an indigenous group of claimants has emerged with a ``material'' stake in a publicly traded company, Indigenous Energy Pty, which advised the group representing the Martu people, said today in an e-mailed statement.

Under Australian law, minerals explorers and developers of pipelines and railways usually need to negotiate terms with indigenous groups that may hold rights to the land. The Martu people are also in negotiations on Rio Tinto Group's Kintyre uranium project, Mega Uranium Ltd.'s Kintyre Rocks venture and a Newcrest Mining Ltd. gold expansion project, among others.

``Hopefully this agreement is going to change the paradigm on how'' accords are reached with aboriginal groups, Joe Procter, principal of Indigenous Energy, said in telephone interview.

``We're getting a lot of resistance on introducing equity in terms of a deal but hopefully this is the first of many. We have two or three more in the pipeline.''

Under the agreement between the Western Desert Lands Aboriginal Corp. and Perth-based Reward Minerals, the Martu people will receive cash payments based on ``milestones'' in the development of the Lake Disappointment project and a production royalty on potassium sulfate and other mine products, Reward said today in a statement to the Australian Stock Exchange. They will also be allocated 7 million unlisted options, exercisable at 50 Australian cents, representing 10.31 percent of the company's diluted capital.

Shares Jump

Reward jumped 25 cents, or 25 percent, to A$1.25 in Sydney trading on the exchange on the announcement of the agreement, which it said ``paves the way'' for mining leases to be granted for the project.

The Martu people have rights over 136,000 square kilometers of land in Western Australia. Their average wage is about A$9,000 ($8,251) a year and life expectancy is about 20 years shorter than for non-aboriginal Australians, Clinton Wolf, chief executive officer of Western Desert Lands Aboriginal, the group representing the Martu, said at a conference in July. The aim of taking stakes in ventures is to help eradicate poverty among the communities, he said.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at [email protected]