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caz wa business article Cazaly to appeal Shovelanna decision in court
7-August-06 by AAP


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Cazaly Resources Ltd is seeking a judicial review of a ministerial decision to deny the junior explorer the right to explore the contested Shovelanna iron ore prospect in north Western Australia.

Cazaly today said it has lodged an application in the Supreme Court of Western Australia for a review of the government decision that terminated its claim on the prospect.

Cazaly had lodged an exploration licence for the Shovelanna project late last August, after Rio Tinto accidentally let its own licence expire.

But WA resources minister John Bowler granted the prospect to Rio Tinto in April.

Cazaly's application to the court today, made through its subsidiary Cazaly Iron Pty Ltd, names Mr Bowler and Rio Tinto subsidiary Hammersley Resources among the respondents.

Cazaly is seeking a ruling setting aside Mr Bowler's decision on the grounds that the WA government's iron ore policy is contrary to state mining legislation and is anti-competitive.

Investors piled into Cazaly shares, pushing the stock up by more than 16 per cent, or 8.5 cents, to end at 60.5 cents, as nearly 16 million shares were traded.

Cazaly is alleging that it has uncovered a "secret" state government policy allowing iron ore tenements to be held on less onerous terms and for a greater time because of the long period between discovery and the commencement of actual mining.

Cazaly also alleges that government policy considers exploration licences for iron ore tenements on the same terms as holding titles.

"Cazaly believes that this policy is clearly inconsistent with the Mining Act 1978 (WA) and therefore invalid," Cazaly managing director Nathan McMahon said.

"It also believes that the policy is anti-competitive in that it allows the traditional iron ore duopoly to retain land and therefore makes it more difficult for new entrants into the iron ore industry."

Mr McMahon said Cazaly would seek to resolve the dispute as quickly as possible so that the development of the project could commence.

The parties will appear in court this Friday for a preliminary hearing on procedural issues.

Mr Bowler in April refused Cazaly's application to explore the Shovelanna project, using powers given by the state's mining legislation to act in the public interest.